Palo Alto City Council
February 5, 2024

CITY COUNCIL and
PUBLIC IMPROVEMENT CORPORATION
Special Meeting
Monday, February 05, 2024
Council Chambers & Hybrid
5:30 PM
Amended Agenda
Amended agenda items appear below in RED
Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference or in person. To maximize public safety while still maintaining transparency and public access, members of the public can choose to participate from home or attend in person.

Information on how the public may observe and participate in the meeting is located at the end of the agenda. Masks are strongly encouraged if attending in person. The meeting will be broadcast on Cable TV Channel 26, live on YouTube https://www.youtube.com/c/cityofpaloalto ,
and streamed to Midpen Media Center https://midpenmedia.org.

VIRTUAL PARTICIPATION CLICK HERE TO JOIN   (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238    Phone:1(669)900‐6833
PUBLIC COMMENTS
Public comments will be accepted both in person and via Zoom for up to three minutes or an amount of time determined by the Chair. All requests to speak will be taken until 5 minutes after the staff’s presentation. Written public comments can be submitted in advance to [email protected] and will be provided to the Council and available for inspection on the City’s website. Please clearly indicate which agenda item you are referencing in your subject line.

PowerPoints, videos, or other media to be presented during public comment are accepted only by email to [email protected] at least 24 hours prior to the meeting. Once received, the  Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted.

TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public.

CALL TO ORDER
SPECIAL ORDERS OF THE DAY (5:30 ‐ 5:50 PM)

1. Santa Clara County 2023 Synopsys Championship Science Fair 2023 STEM Winners from Palo Alto
CLOSED SESSION (5:50 ‐ 6:50 PM)
AA1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators:
(Ed Shikada, Chantal Cotton Gaines, Kristen O'Kane, Sunny Tong) Subject of Negotiations: Purchase, Exchange, and/or Lease Price and Terms of Payment New Item added
AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT (6:50 ‐ 7:05 PM)
Members of the public may speak to any item NOT on the agenda. 1‐3 minutes depending on # of speakers. Council reserves the right to limit the duration of Oral Communications period to 30 minutes.

COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (7:05 ‐ 7:10 PM) Members of the public may not speak to the item(s).

CONSENT CALENDAR (7:10 ‐ 7:15 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.

2. Approval of Minutes from January 16, 2024 Meeting

3. Review and Acceptance of Annual Report on Development Impact Fees for Fiscal Year 2023 and Adoption of a Resolution Making Statutory Findings for Certain Funds. CEQA status ‐ Not a Project.

4. Approval of Amendment Number 1 to Contract Number S21180652 With Eric Gouldsberry Art Design (EGAD), in the Amount of $170,000 for Graphic Design Services to Extend the Term for Additional Two Years; for a Total Not‐to‐Exceed Amount of $410,000 over the Five‐year Term; CEQA Status – Not a Project

5. Approval of Amendment No. 2 to Contract S23184693 with Infosend, Inc. for Printing Services for the Utilities Department Programs and Projects to add $300,000 for a New Total Not to Exceed Amount of $555,000, and to Amend the Schedule of Rates. CEQA status: not a project.

6. Approval of Contract No. C23187298C with Hinderliter, de Llamas, and Associates (HdL) for Business Tax and Business Registry Certificate Program Fee Consulting Services in a Total Not‐To‐Exceed Amount of $860,555 Over a Three‐Year Term; CEQA Status – Not a Project

7. SECOND READING: Adopt Ordinances Amending Planned Community Ordinance 2343 for 2901‐2905 Middlefield Road and Establishing a Separate Planned Community Zoning Designation for 702 Ellsworth Place to Enable the Development of a new Single‐Story, Single‐Family Residence. CEQA Status ‐‐ Categorically Exempt Under CEQA Guidelines Sections 15061(b)(3), 15301, and 15303 (FIRST READING: December 11, 2023 PASSED 6‐ 0‐1, Veenker absent) Consent Questions

8. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Chapter

8.04 (Street, Trees, Shrubs, and Plants) and Chapter 8.10 (Tree Preservation and Management Regulations) (FIRST READING: January 16, 2024 PASSED 5‐2, Lythcott‐ Haims, Tanaka no)

9. SECOND READING: Adopt an Ordinance to Expand the Public Art Commission (PAC) from Five to Seven Members (FIRST READING: January 16, 2024 PASSED 7‐0)

10. SECOND READING: Adoption of an Ordinance Amending Palo Alto Municipal Code Title 18 (Zoning) Chapters 18.14 (Housing Incentives), 18.76 (Permits and Approvals), and

18.77 (Processing of Permits and Approvals) to Implement Housing Element Program 1.3 Creating By‐Right Zoning Approval for Specific Housing Element Inventory Sites. CEQA Status: An Addendum to the City’s Comprehensive Plan Environmental Impact Report was Prepared for the 2023‐2031 Housing Element. (FIRST READING: January 22, 2024 PASSED 6‐1, Kou no)

11. SECOND READING: Adoption of an Ordinance Authorizing the Improvements to the Palo Alto Baylands as Part of the Horizontal Levee Pilot Project and Approval of a Cooperative Agreement with the Association of Bay Area Governments to Construct the Horizontal Levee Pilot Project (WQ‐22001); CEQA – exempt under Section 15133 (FIRST READING: January 22, 2024 PASSED 7‐0)
CITY MANAGER COMMENTS (7:15 ‐ 7:30 PM)
RECESS CITY COUNCIL MEETING AND CONVENE PUBLIC IMPROVEMENT CORPORATION

MEETING
ACTION ITEMS (Item 12: 7:30 ‐ 7:50 PM)
Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

12. Approval of Fiscal Year 2023 Palo Alto Public Improvement Corporation's Annual Financial Report. CEQA Status ‐ Not a Project
BREAK (5‐10 MINUTES)
RECONVENE CITY COUNCIL MEETING
ACTION ITEMS (Item 13: 8:00 ‐ 10:00 PM, Item 14: 10:00 ‐ 10:30 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

13. Policy and Services Committee Recommendations for Changes to the City Council Procedures and Protocols Handbook based on Prior City Council Referrals (Continued from December 18, 2023). CEQA Status ‐ Not a Project.

14. Policy and Services Committee Recommendation to the City Council to Approve a new Friendship Cities Program in Palo Alto. CEQA Status – Not a Project

ADJOURNMENT
INFORMATION REPORTS
Information reports are provided for informational purposes only to the Council and the public but are not listed for action during this meeting’s agenda.

15. Quarterly Informational Report on Sustainability and Climate Action Plan (S/CAP) Implementation; CEQA status – Not a Project
OTHER INFORMATION
Standing Committee Meetings this week
Finance Committee February 6, 2024 CANCELED
Public Comment Letters
Schedule of Meetings
AMENDED AGENDA ITEMS
AA1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators: (Ed Shikada, Chantal Cotton Gaines, Kristen O'Kane, Sunny Tong) Subject of Negotiations: Purchase, Exchange, and/or Lease Price and Terms of Payment New Item added
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone.

1.  Written public comments  may be submitted by email to [email protected].

2.  For in person public comments  please complete a speaker request card located on the table at the entrance to the Council Chambers and deliver it to the Clerk prior to discussion of the item.

3.  Spoken public comments using a computer or smart phone  will be accepted through the teleconference meeting. To address the Council, click on the link below to access a Zoom‐based meeting. Please read the following instructions carefully.

You may download the Zoom client or connect to the meeting in‐ browser. If using your browser, make sure you are using a current, up‐to‐date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below.

You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak.

When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak.

When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments.

4.  Spoken public comments using a phone  use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted.

CLICK HERE TO JOIN    Meeting ID: 362‐027‐238   Phone: 1‐669‐900‐6833 Americans with Disability Act (ADA)
It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at (650) 329‐2550 (voice) or by emailing  [email protected]. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service.
1 February 05, 2024
Materials submitted after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org/agendas.

CITY COUNCIL and
PUBLIC IMPROVEMENT CORPORATION
Special Meeting
Monday, February 05, 2024
Council Chambers & Hybrid
5:30 PM
Amended Agenda
Amended agenda items appear below in RED
Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference or in person. To maximize public safety while still maintaining transparency and public access, members of the public can choose to participate from home or attend in person.

Information on how the public may observe and participate in the meeting is located at the end of the agenda. Masks are strongly encouraged if attending in person. The meeting will be broadcast on Cable TV Channel 26, live on YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center https://midpenmedia.org.

VIRTUAL PARTICIPATION CLICK HERE TO JOIN   (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238    Phone:1(669)900‐6833
PUBLIC COMMENTS
Public comments will be accepted both in person and via Zoom for up to three minutes or an amount of time determined by the Chair. All requests to speak will be taken until 5 minutes after the staff’s presentation. Written public comments can be submitted in advance to [email protected] and will be provided to the Council and available for inspection on the City’s website. Please clearly indicate which agenda item you are referencing in your subject line.

PowerPoints, videos, or other media to be presented during public comment are accepted only by email to [email protected] at least 24 hours prior to the meeting. Once received, the  Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted.

TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public.

CALL TO ORDER
SPECIAL ORDERS OF THE DAY (5:30 ‐ 5:50 PM)

1. Santa Clara County 2023 Synopsys Championship Science Fair 2023 STEM Winners from Palo Alto
CLOSED SESSION (5:50 ‐ 6:50 PM)
AA1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators:
(Ed Shikada, Chantal Cotton Gaines, Kristen O'Kane, Sunny Tong) Subject of Negotiations: Purchase, Exchange, and/or Lease Price and Terms of Payment New Item added
AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT (6:50 ‐ 7:05 PM)
Members of the public may speak to any item NOT on the agenda. 1‐3 minutes depending on # of speakers. Council reserves the right to limit the duration of Oral Communications period to 30 minutes.

COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (7:05 ‐ 7:10 PM) Members of the public may not speak to the item(s).

CONSENT CALENDAR (7:10 ‐ 7:15 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.

2. Approval of Minutes from January 16, 2024 Meeting

3. Review and Acceptance of Annual Report on Development Impact Fees for Fiscal Year 2023 and Adoption of a Resolution Making Statutory Findings for Certain Funds. CEQA status ‐ Not a Project.

4. Approval of Amendment Number 1 to Contract Number S21180652 With Eric Gouldsberry Art Design (EGAD), in the Amount of $170,000 for Graphic Design Services to Extend the Term for Additional Two Years; for a Total Not‐to‐Exceed Amount of $410,000 over the Five‐year Term; CEQA Status – Not a Project

5. Approval of Amendment No. 2 to Contract S23184693 with Infosend, Inc. for Printing Services for the Utilities Department Programs and Projects to add $300,000 for a New Total Not to Exceed Amount of $555,000, and to Amend the Schedule of Rates. CEQA status: not a project.

6. Approval of Contract No. C23187298C with Hinderliter, de Llamas, and Associates (HdL) for Business Tax and Business Registry Certificate Program Fee Consulting Services in a Total Not‐To‐Exceed Amount of $860,555 Over a Three‐Year Term; CEQA Status – Not a Project

7. SECOND READING: Adopt Ordinances Amending Planned Community Ordinance 2343 for 2901‐2905 Middlefield Road and Establishing a Separate Planned Community Zoning Designation for 702 Ellsworth Place to Enable the Development of a new Single‐Story, Single‐Family Residence. CEQA Status ‐‐ Categorically Exempt Under CEQA Guidelines Sections 15061(b)(3), 15301, and 15303 (FIRST READING: December 11, 2023 PASSED 6‐ 0‐1, Veenker absent) Consent Questions

8. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Chapter

8.04 (Street, Trees, Shrubs, and Plants) and Chapter 8.10 (Tree Preservation and Management Regulations) (FIRST READING: January 16, 2024 PASSED 5‐2, Lythcott‐ Haims, Tanaka no)

9. SECOND READING: Adopt an Ordinance to Expand the Public Art Commission (PAC) from Five to Seven Members (FIRST READING: January 16, 2024 PASSED 7‐0)

10. SECOND READING: Adoption of an Ordinance Amending Palo Alto Municipal Code Title 18 (Zoning) Chapters 18.14 (Housing Incentives), 18.76 (Permits and Approvals), and

18.77 (Processing of Permits and Approvals) to Implement Housing Element Program 1.3 Creating By‐Right Zoning Approval for Specific Housing Element Inventory Sites. CEQA Status: An Addendum to the City’s Comprehensive Plan Environmental Impact Report was Prepared for the 2023‐2031 Housing Element. (FIRST READING: January 22, 2024 PASSED 6‐1, Kou no)

11. SECOND READING: Adoption of an Ordinance Authorizing the Improvements to the Palo Alto Baylands as Part of the Horizontal Levee Pilot Project and Approval of a Cooperative Agreement with the Association of Bay Area Governments to Construct the Horizontal Levee Pilot Project (WQ‐22001); CEQA – exempt under Section 15133 (FIRST READING: January 22, 2024 PASSED 7‐0)
CITY MANAGER COMMENTS (7:15 ‐ 7:30 PM)
RECESS CITY COUNCIL MEETING AND CONVENE PUBLIC IMPROVEMENT CORPORATION

MEETING
ACTION ITEMS (Item 12: 7:30 ‐ 7:50 PM)
Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

12. Approval of Fiscal Year 2023 Palo Alto Public Improvement Corporation's Annual Financial Report. CEQA Status ‐ Not a Project
BREAK (5‐10 MINUTES)
RECONVENE CITY COUNCIL MEETING
ACTION ITEMS (Item 13: 8:00 ‐ 10:00 PM, Item 14: 10:00 ‐ 10:30 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

13. Policy and Services Committee Recommendations for Changes to the City Council Procedures and Protocols Handbook based on Prior City Council Referrals (Continued from December 18, 2023). CEQA Status ‐ Not a Project.

14. Policy and Services Committee Recommendation to the City Council to Approve a new Friendship Cities Program in Palo Alto. CEQA Status – Not a Project

ADJOURNMENT
INFORMATION REPORTS
Information reports are provided for informational purposes only to the Council and the public but are not listed for action during this meeting’s agenda.

15. Quarterly Informational Report on Sustainability and Climate Action Plan (S/CAP) Implementation; CEQA status – Not a Project
OTHER INFORMATION
Standing Committee Meetings this week
Finance Committee February 6, 2024 CANCELED
Public Comment Letters
Schedule of Meetings
AMENDED AGENDA ITEMS
AA1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators: (Ed Shikada, Chantal Cotton Gaines, Kristen O'Kane, Sunny Tong) Subject of Negotiations: Purchase, Exchange, and/or Lease Price and Terms of Payment New Item added
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone.

1.  Written public comments  may be submitted by email to [email protected].

2.  For in person public comments  please complete a speaker request card located on the table at the entrance to the Council Chambers and deliver it to the Clerk prior to discussion of the item.

3.  Spoken public comments using a computer or smart phone  will be accepted through the teleconference meeting. To address the Council, click on the link below to access a Zoom‐based meeting. Please read the following instructions carefully.

You may download the Zoom client or connect to the meeting in‐ browser. If using your browser, make sure you are using a current, up‐to‐date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below.

You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak.

When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak.

When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments.

4.  Spoken public comments using a phone  use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted.

CLICK HERE TO JOIN    Meeting ID: 362‐027‐238   Phone: 1‐669‐900‐6833 Americans with Disability Act (ADA)  It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at (650) 329‐2550 (voice) or by emailing  [email protected]. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service.

2 February 05, 2024
Materials submitted after distribution of the agenda packet are available for public inspection at
www.CityofPaloAlto.org/agendas
.

CITY COUNCIL and
PUBLIC IMPROVEMENT CORPORATION
Special Meeting
Monday, February 05, 2024
Council Chambers & Hybrid
5:30 PM
Amended Agenda
Amended agenda items appear below in RED
Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference or in person. To maximize public safety while still maintaining transparency and public access, members of the public can choose to participate from home or attend in person.

Information on how the public may observe and participate in the meeting is located at the end of the agenda. Masks are strongly encouraged if attending in person. The meeting will be broadcast on Cable TV Channel 26, live on YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center https://midpenmedia.org.

VIRTUAL PARTICIPATION CLICK HERE TO JOIN   (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238    Phone:1(669)900‐6833
PUBLIC COMMENTS
Public comments will be accepted both in person and via Zoom for up to three minutes or an amount of time determined by the Chair. All requests to speak will be taken until 5 minutes after the staff’s presentation. Written public comments can be submitted in advance to [email protected] and will be provided to the Council and available for inspection on the City’s website. Please clearly indicate which agenda item you are referencing in your subject line.

PowerPoints, videos, or other media to be presented during public comment are accepted only by email to [email protected] at least 24 hours prior to the meeting. Once received, the  Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted.

TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public.

CALL TO ORDER
SPECIAL ORDERS OF THE DAY (5:30 ‐ 5:50 PM)

1. Santa Clara County 2023 Synopsys Championship Science Fair 2023 STEM Winners from Palo Alto
CLOSED SESSION (5:50 ‐ 6:50 PM)
AA1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators:
(Ed Shikada, Chantal Cotton Gaines, Kristen O'Kane, Sunny Tong) Subject of Negotiations: Purchase, Exchange, and/or Lease Price and Terms of Payment New Item added
AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT (6:50 ‐ 7:05 PM)
Members of the public may speak to any item NOT on the agenda. 1‐3 minutes depending on # of speakers. Council reserves the right to limit the duration of Oral Communications period to 30 minutes.

COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (7:05 ‐ 7:10 PM) Members of the public may not speak to the item(s).

CONSENT CALENDAR (7:10 ‐ 7:15 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.

2. Approval of Minutes from January 16, 2024 Meeting

3. Review and Acceptance of Annual Report on Development Impact Fees for Fiscal Year 2023 and Adoption of a Resolution Making Statutory Findings for Certain Funds. CEQA status ‐ Not a Project.

4. Approval of Amendment Number 1 to Contract Number S21180652 With Eric Gouldsberry Art Design (EGAD), in the Amount of $170,000 for Graphic Design Services to Extend the Term for Additional Two Years; for a Total Not‐to‐Exceed Amount of $410,000 over the Five‐year Term; CEQA Status – Not a Project

5. Approval of Amendment No. 2 to Contract S23184693 with Infosend, Inc. for Printing Services for the Utilities Department Programs and Projects to add $300,000 for a New Total Not to Exceed Amount of $555,000, and to Amend the Schedule of Rates. CEQA status: not a project.

6. Approval of Contract No. C23187298C with Hinderliter, de Llamas, and Associates (HdL) for Business Tax and Business Registry Certificate Program Fee Consulting Services in a Total Not‐To‐Exceed Amount of $860,555 Over a Three‐Year Term; CEQA Status – Not a Project

7. SECOND READING: Adopt Ordinances Amending Planned Community Ordinance 2343 for 2901‐2905 Middlefield Road and Establishing a Separate Planned Community Zoning Designation for 702 Ellsworth Place to Enable the Development of a new Single‐Story, Single‐Family Residence. CEQA Status ‐‐ Categorically Exempt Under CEQA Guidelines Sections 15061(b)(3), 15301, and 15303 (FIRST READING: December 11, 2023 PASSED 6‐ 0‐1, Veenker absent) Consent Questions

8. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Chapter

8.04 (Street, Trees, Shrubs, and Plants) and Chapter 8.10 (Tree Preservation and Management Regulations) (FIRST READING: January 16, 2024 PASSED 5‐2, Lythcott‐ Haims, Tanaka no)

9. SECOND READING: Adopt an Ordinance to Expand the Public Art Commission (PAC) from Five to Seven Members (FIRST READING: January 16, 2024 PASSED 7‐0)

10. SECOND READING: Adoption of an Ordinance Amending Palo Alto Municipal Code Title 18 (Zoning) Chapters 18.14 (Housing Incentives), 18.76 (Permits and Approvals), and

18.77 (Processing of Permits and Approvals) to Implement Housing Element Program 1.3 Creating By‐Right Zoning Approval for Specific Housing Element Inventory Sites. CEQA Status: An Addendum to the City’s Comprehensive Plan Environmental Impact Report was Prepared for the 2023‐2031 Housing Element. (FIRST READING: January 22, 2024 PASSED 6‐1, Kou no)

11. SECOND READING: Adoption of an Ordinance Authorizing the Improvements to the Palo Alto Baylands as Part of the Horizontal Levee Pilot Project and Approval of a Cooperative Agreement with the Association of Bay Area Governments to Construct the Horizontal Levee Pilot Project (WQ‐22001); CEQA – exempt under Section 15133 (FIRST READING: January 22, 2024 PASSED 7‐0)
CITY MANAGER COMMENTS (7:15 ‐ 7:30 PM)
RECESS CITY COUNCIL MEETING AND CONVENE PUBLIC IMPROVEMENT CORPORATION

MEETING
ACTION ITEMS (Item 12: 7:30 ‐ 7:50 PM)
Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

12. Approval of Fiscal Year 2023 Palo Alto Public Improvement Corporation's Annual Financial Report. CEQA Status ‐ Not a Project
BREAK (5‐10 MINUTES)
RECONVENE CITY COUNCIL MEETING
ACTION ITEMS (Item 13: 8:00 ‐ 10:00 PM, Item 14: 10:00 ‐ 10:30 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

13. Policy and Services Committee Recommendations for Changes to the City Council Procedures and Protocols Handbook based on Prior City Council Referrals (Continued from December 18, 2023). CEQA Status ‐ Not a Project.

14. Policy and Services Committee Recommendation to the City Council to Approve a new Friendship Cities Program in Palo Alto. CEQA Status – Not a Project

ADJOURNMENT
INFORMATION REPORTS
Information reports are provided for informational purposes only to the Council and the public but are not listed for action during this meeting’s agenda.

15. Quarterly Informational Report on Sustainability and Climate Action Plan (S/CAP) Implementation; CEQA status – Not a Project
OTHER INFORMATION
Standing Committee Meetings this week
Finance Committee February 6, 2024 CANCELED
Public Comment Letters
Schedule of Meetings
AMENDED AGENDA ITEMS
AA1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators: (Ed Shikada, Chantal Cotton Gaines, Kristen O'Kane, Sunny Tong) Subject of Negotiations: Purchase, Exchange, and/or Lease Price and Terms of Payment New Item added
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone.

1.  Written public comments  may be submitted by email to [email protected].

2.  For in person public comments  please complete a speaker request card located on the table at the entrance to the Council Chambers and deliver it to the Clerk prior to discussion of the item.

3.  Spoken public comments using a computer or smart phone  will be accepted through the teleconference meeting. To address the Council, click on the link below to access a Zoom‐based meeting. Please read the following instructions carefully.

You may download the Zoom client or connect to the meeting in‐ browser. If using your browser, make sure you are using a current, up‐to‐date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below.

You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak.

When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak.

When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments.

4.  Spoken public comments using a phone  use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted.

CLICK HERE TO JOIN    Meeting ID: 362‐027‐238   Phone: 1‐669‐900‐6833 Americans with Disability Act (ADA)  It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at (650) 329‐2550 (voice) or by emailing  [email protected]. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service.

3 February 05, 2024
Materials submitted after distribution of the agenda packet are available for public inspection at
www.CityofPaloAlto.org/agendas
.

CITY COUNCIL and
PUBLIC IMPROVEMENT CORPORATION
Special Meeting
Monday, February 05, 2024
Council Chambers & Hybrid
5:30 PM
Amended Agenda
Amended agenda items appear below in RED
Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference or in person. To maximize public safety while still maintaining transparency and public access, members of the public can choose to participate from home or attend in person.

Information on how the public may observe and participate in the meeting is located at the end of the agenda. Masks are strongly encouraged if attending in person. The meeting will be broadcast on Cable TV Channel 26, live on YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center https://midpenmedia.org.

VIRTUAL PARTICIPATION CLICK HERE TO JOIN   (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238    Phone:1(669)900‐6833
PUBLIC COMMENTS
Public comments will be accepted both in person and via Zoom for up to three minutes or an amount of time determined by the Chair. All requests to speak will be taken until 5 minutes after the staff’s presentation. Written public comments can be submitted in advance to [email protected] and will be provided to the Council and available for inspection on the City’s website. Please clearly indicate which agenda item you are referencing in your subject line.

PowerPoints, videos, or other media to be presented during public comment are accepted only by email to [email protected] at least 24 hours prior to the meeting. Once received, the  Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted.

TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public.

CALL TO ORDER
SPECIAL ORDERS OF THE DAY (5:30 ‐ 5:50 PM)

1. Santa Clara County 2023 Synopsys Championship Science Fair 2023 STEM Winners from Palo Alto
CLOSED SESSION (5:50 ‐ 6:50 PM)
AA1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators:
(Ed Shikada, Chantal Cotton Gaines, Kristen O'Kane, Sunny Tong) Subject of Negotiations: Purchase, Exchange, and/or Lease Price and Terms of Payment New Item added
AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT (6:50 ‐ 7:05 PM)
Members of the public may speak to any item NOT on the agenda. 1‐3 minutes depending on # of speakers. Council reserves the right to limit the duration of Oral Communications period to 30 minutes.

COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (7:05 ‐ 7:10 PM) Members of the public may not speak to the item(s).

CONSENT CALENDAR (7:10 ‐ 7:15 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.

2. Approval of Minutes from January 16, 2024 Meeting

3. Review and Acceptance of Annual Report on Development Impact Fees for Fiscal Year 2023 and Adoption of a Resolution Making Statutory Findings for Certain Funds. CEQA status ‐ Not a Project.

4. Approval of Amendment Number 1 to Contract Number S21180652 With Eric Gouldsberry Art Design (EGAD), in the Amount of $170,000 for Graphic Design Services to Extend the Term for Additional Two Years; for a Total Not‐to‐Exceed Amount of $410,000 over the Five‐year Term; CEQA Status – Not a Project

5. Approval of Amendment No. 2 to Contract S23184693 with Infosend, Inc. for Printing Services for the Utilities Department Programs and Projects to add $300,000 for a New Total Not to Exceed Amount of $555,000, and to Amend the Schedule of Rates. CEQA status: not a project.

6. Approval of Contract No. C23187298C with Hinderliter, de Llamas, and Associates (HdL) for Business Tax and Business Registry Certificate Program Fee Consulting Services in a Total Not‐To‐Exceed Amount of $860,555 Over a Three‐Year Term; CEQA Status – Not a Project

7. SECOND READING: Adopt Ordinances Amending Planned Community Ordinance 2343 for 2901‐2905 Middlefield Road and Establishing a Separate Planned Community Zoning Designation for 702 Ellsworth Place to Enable the Development of a new Single‐Story, Single‐Family Residence. CEQA Status ‐‐ Categorically Exempt Under CEQA Guidelines Sections 15061(b)(3), 15301, and 15303 (FIRST READING: December 11, 2023 PASSED 6‐ 0‐1, Veenker absent) Consent Questions

8. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Chapter

8.04 (Street, Trees, Shrubs, and Plants) and Chapter 8.10 (Tree Preservation and Management Regulations) (FIRST READING: January 16, 2024 PASSED 5‐2, Lythcott‐ Haims, Tanaka no)

9. SECOND READING: Adopt an Ordinance to Expand the Public Art Commission (PAC) from Five to Seven Members (FIRST READING: January 16, 2024 PASSED 7‐0)

10. SECOND READING: Adoption of an Ordinance Amending Palo Alto Municipal Code Title 18 (Zoning) Chapters 18.14 (Housing Incentives), 18.76 (Permits and Approvals), and

18.77 (Processing of Permits and Approvals) to Implement Housing Element Program 1.3 Creating By‐Right Zoning Approval for Specific Housing Element Inventory Sites. CEQA Status: An Addendum to the City’s Comprehensive Plan Environmental Impact Report was Prepared for the 2023‐2031 Housing Element. (FIRST READING: January 22, 2024 PASSED 6‐1, Kou no)

11. SECOND READING: Adoption of an Ordinance Authorizing the Improvements to the Palo Alto Baylands as Part of the Horizontal Levee Pilot Project and Approval of a Cooperative Agreement with the Association of Bay Area Governments to Construct the Horizontal Levee Pilot Project (WQ‐22001); CEQA – exempt under Section 15133 (FIRST READING: January 22, 2024 PASSED 7‐0)
CITY MANAGER COMMENTS (7:15 ‐ 7:30 PM)
RECESS CITY COUNCIL MEETING AND CONVENE PUBLIC IMPROVEMENT CORPORATION

MEETING
ACTION ITEMS (Item 12: 7:30 ‐ 7:50 PM)
Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

12. Approval of Fiscal Year 2023 Palo Alto Public Improvement Corporation's Annual Financial Report. CEQA Status ‐ Not a Project
BREAK (5‐10 MINUTES)
RECONVENE CITY COUNCIL MEETING
ACTION ITEMS (Item 13: 8:00 ‐ 10:00 PM, Item 14: 10:00 ‐ 10:30 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

13. Policy and Services Committee Recommendations for Changes to the City Council Procedures and Protocols Handbook based on Prior City Council Referrals (Continued from December 18, 2023). CEQA Status ‐ Not a Project.

14. Policy and Services Committee Recommendation to the City Council to Approve a new Friendship Cities Program in Palo Alto. CEQA Status – Not a Project

ADJOURNMENT
INFORMATION REPORTS
Information reports are provided for informational purposes only to the Council and the public but are not listed for action during this meeting’s agenda.

15. Quarterly Informational Report on Sustainability and Climate Action Plan (S/CAP) Implementation; CEQA status – Not a Project
OTHER INFORMATION
Standing Committee Meetings this week
Finance Committee February 6, 2024 CANCELED
Public Comment Letters
Schedule of Meetings
AMENDED AGENDA ITEMS
AA1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators: (Ed Shikada, Chantal Cotton Gaines, Kristen O'Kane, Sunny Tong) Subject of Negotiations: Purchase, Exchange, and/or Lease Price and Terms of Payment New Item added
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone.

1.  Written public comments  may be submitted by email to [email protected].

2.  For in person public comments  please complete a speaker request card located on the table at the entrance to the Council Chambers and deliver it to the Clerk prior to discussion of the item.

3.  Spoken public comments using a computer or smart phone  will be accepted through the teleconference meeting. To address the Council, click on the link below to access a Zoom‐based meeting. Please read the following instructions carefully.

You may download the Zoom client or connect to the meeting in‐ browser. If using your browser, make sure you are using a current, up‐to‐date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below.

You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak.

When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak.

When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments.

4.  Spoken public comments using a phone  use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted.

CLICK HERE TO JOIN    Meeting ID: 362‐027‐238   Phone: 1‐669‐900‐6833 Americans with Disability Act (ADA)  It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at (650) 329‐2550 (voice) or by emailing  [email protected]. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service.

4 February 05, 2024
Materials submitted after distribution of the agenda packet are available for public inspection at
www.CityofPaloAlto.org/agendas
.

CITY COUNCIL and
PUBLIC IMPROVEMENT CORPORATION
Special Meeting
Monday, February 05, 2024
Council Chambers & Hybrid
5:30 PM
Amended Agenda
Amended agenda items appear below in RED
Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference or in person. To maximize public safety while still maintaining transparency and public access, members of the public can choose to participate from home or attend in person.

Information on how the public may observe and participate in the meeting is located at the end of the agenda. Masks are strongly encouraged if attending in person. The meeting will be broadcast on Cable TV Channel 26, live on YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center https://midpenmedia.org.

VIRTUAL PARTICIPATION CLICK HERE TO JOIN   (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238    Phone:1(669)900‐6833
PUBLIC COMMENTS
Public comments will be accepted both in person and via Zoom for up to three minutes or an amount of time determined by the Chair. All requests to speak will be taken until 5 minutes after the staff’s presentation. Written public comments can be submitted in advance to [email protected] and will be provided to the Council and available for inspection on the City’s website. Please clearly indicate which agenda item you are referencing in your subject line.

PowerPoints, videos, or other media to be presented during public comment are accepted only by email to [email protected] at least 24 hours prior to the meeting. Once received, the  Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted.

TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public.

CALL TO ORDER
SPECIAL ORDERS OF THE DAY (5:30 ‐ 5:50 PM)

1. Santa Clara County 2023 Synopsys Championship Science Fair 2023 STEM Winners from Palo Alto
CLOSED SESSION (5:50 ‐ 6:50 PM)
AA1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators:
(Ed Shikada, Chantal Cotton Gaines, Kristen O'Kane, Sunny Tong) Subject of Negotiations: Purchase, Exchange, and/or Lease Price and Terms of Payment New Item added
AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT (6:50 ‐ 7:05 PM)
Members of the public may speak to any item NOT on the agenda. 1‐3 minutes depending on # of speakers. Council reserves the right to limit the duration of Oral Communications period to 30 minutes.

COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (7:05 ‐ 7:10 PM) Members of the public may not speak to the item(s).

CONSENT CALENDAR (7:10 ‐ 7:15 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.

2. Approval of Minutes from January 16, 2024 Meeting

3. Review and Acceptance of Annual Report on Development Impact Fees for Fiscal Year 2023 and Adoption of a Resolution Making Statutory Findings for Certain Funds. CEQA status ‐ Not a Project.

4. Approval of Amendment Number 1 to Contract Number S21180652 With Eric Gouldsberry Art Design (EGAD), in the Amount of $170,000 for Graphic Design Services to Extend the Term for Additional Two Years; for a Total Not‐to‐Exceed Amount of $410,000 over the Five‐year Term; CEQA Status – Not a Project

5. Approval of Amendment No. 2 to Contract S23184693 with Infosend, Inc. for Printing Services for the Utilities Department Programs and Projects to add $300,000 for a New Total Not to Exceed Amount of $555,000, and to Amend the Schedule of Rates. CEQA status: not a project.

6. Approval of Contract No. C23187298C with Hinderliter, de Llamas, and Associates (HdL) for Business Tax and Business Registry Certificate Program Fee Consulting Services in a Total Not‐To‐Exceed Amount of $860,555 Over a Three‐Year Term; CEQA Status – Not a Project

7. SECOND READING: Adopt Ordinances Amending Planned Community Ordinance 2343 for 2901‐2905 Middlefield Road and Establishing a Separate Planned Community Zoning Designation for 702 Ellsworth Place to Enable the Development of a new Single‐Story, Single‐Family Residence. CEQA Status ‐‐ Categorically Exempt Under CEQA Guidelines Sections 15061(b)(3), 15301, and 15303 (FIRST READING: December 11, 2023 PASSED 6‐ 0‐1, Veenker absent) Consent Questions

8. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Chapter

8.04 (Street, Trees, Shrubs, and Plants) and Chapter 8.10 (Tree Preservation and Management Regulations) (FIRST READING: January 16, 2024 PASSED 5‐2, Lythcott‐ Haims, Tanaka no)

9. SECOND READING: Adopt an Ordinance to Expand the Public Art Commission (PAC) from Five to Seven Members (FIRST READING: January 16, 2024 PASSED 7‐0)

10. SECOND READING: Adoption of an Ordinance Amending Palo Alto Municipal Code Title 18 (Zoning) Chapters 18.14 (Housing Incentives), 18.76 (Permits and Approvals), and

18.77 (Processing of Permits and Approvals) to Implement Housing Element Program 1.3 Creating By‐Right Zoning Approval for Specific Housing Element Inventory Sites. CEQA Status: An Addendum to the City’s Comprehensive Plan Environmental Impact Report was Prepared for the 2023‐2031 Housing Element. (FIRST READING: January 22, 2024 PASSED 6‐1, Kou no)

11. SECOND READING: Adoption of an Ordinance Authorizing the Improvements to the Palo Alto Baylands as Part of the Horizontal Levee Pilot Project and Approval of a Cooperative Agreement with the Association of Bay Area Governments to Construct the Horizontal Levee Pilot Project (WQ‐22001); CEQA – exempt under Section 15133 (FIRST READING: January 22, 2024 PASSED 7‐0)
CITY MANAGER COMMENTS (7:15 ‐ 7:30 PM)
RECESS CITY COUNCIL MEETING AND CONVENE PUBLIC IMPROVEMENT CORPORATION

MEETING
ACTION ITEMS (Item 12: 7:30 ‐ 7:50 PM)
Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

12. Approval of Fiscal Year 2023 Palo Alto Public Improvement Corporation's Annual Financial Report. CEQA Status ‐ Not a Project
BREAK (5‐10 MINUTES)
RECONVENE CITY COUNCIL MEETING
ACTION ITEMS (Item 13: 8:00 ‐ 10:00 PM, Item 14: 10:00 ‐ 10:30 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

13. Policy and Services Committee Recommendations for Changes to the City Council Procedures and Protocols Handbook based on Prior City Council Referrals (Continued from December 18, 2023). CEQA Status ‐ Not a Project.

14. Policy and Services Committee Recommendation to the City Council to Approve a new Friendship Cities Program in Palo Alto. CEQA Status – Not a Project

ADJOURNMENT
INFORMATION REPORTS
Information reports are provided for informational purposes only to the Council and the public but are not listed for action during this meeting’s agenda.

15. Quarterly Informational Report on Sustainability and Climate Action Plan (S/CAP) Implementation; CEQA status – Not a Project
OTHER INFORMATION
Standing Committee Meetings this week
Finance Committee February 6, 2024 CANCELED
Public Comment Letters
Schedule of Meetings
AMENDED AGENDA ITEMS
AA1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators: (Ed Shikada, Chantal Cotton Gaines, Kristen O'Kane, Sunny Tong) Subject of Negotiations: Purchase, Exchange, and/or Lease Price and Terms of Payment New Item added
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone.

1.  Written public comments  may be submitted by email to [email protected].

2.  For in person public comments  please complete a speaker request card located on the table at the entrance to the Council Chambers and deliver it to the Clerk prior to discussion of the item.

3.  Spoken public comments using a computer or smart phone  will be accepted through the teleconference meeting. To address the Council, click on the link below to access a Zoom‐based meeting. Please read the following instructions carefully.

You may download the Zoom client or connect to the meeting in‐ browser. If using your browser, make sure you are using a current, up‐to‐date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below.

You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak.

When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak.

When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments.

4.  Spoken public comments using a phone  use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted.

CLICK HERE TO JOIN    Meeting ID: 362‐027‐238   Phone: 1‐669‐900‐6833 Americans with Disability Act (ADA)  It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at (650) 329‐2550 (voice) or by emailing  [email protected]. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service.

5 February 05, 2024
Materials submitted after distribution of the agenda packet are available for public inspection at
www.CityofPaloAlto.org/agendas
.

City Council
Staff Report
Report Type: SPECIAL ORDERS OF THE DAY
Lead Department: City Clerk
Meeting Date: February 5, 2024
Report #:2401-2543
TITLE
Santa Clara County 2023 Synopsys Championship Science Fair 2023 STEM Winners from Palo Alto

BACKGROUND
The Santa Clara Valley Science and Engineering Fair Association is asking the Mayor and City Council to recognize the 2023 Synopsys Championship Science Fair STEM Winners from Palo Alto.

Name Project Title
Rrishi Anand Unsupervised Detection of Abnormal Crop Changes from Aerial Images
Oscar Anderson Impact of Mycorrhizae on Terrestrial Carbon Sinks Under Elevated CO2 Levels: How Fungi Can Slow Climate Change
Connor Chin A Signal Processing Modeling and Feedback System for Stringed Instrument Musicians
Jacob Chiu Water Boiling Device with Heat Exchanger-Based Preheating to Produce Potable Water with Increased Energy Efficiency
David Clark The Seed Speader
Carina Gross AVIAN: Aerial Video Identification Automated Network-Novel Machine Learning to Monitor Bird Population by Flight Pattern Roy Gross Tactical Drone Detection and Tracking using Machine-Learned Radio Interferometry: Lessons from Ukraine
Ryan Kim BeeSafe: Detecting Bee Diseases with Multi-Scale Object Detection and Generative Adversarial Networks (GANs)
Alan Lee Connectedness in Friends-and-Strangers Graph of Spiders and Complements
Lauren Lee Probiotics Protect Tomato Growth from Sodium Dodecyl Sulfate- Induced Stress
Maya Mazin Seaweed and its Absorption of CO2 in Worms
Divij Motwani Ankh- Navigation and Obstacle Avoidance for the Visually Impaired Adrit Rao Automated Segmentation and Measurement of Aortic Aneurysms in Computed Tomography Angiography Using Deep Learning
Item 1
Item 1 Staff Report

Item 1: Staff Report
Pg.
1 Packet Pg. 6 of 263

Dalia Saal Can Argon Flushing a Fridge Reduce Food Waste? Daniel Siegel OctoGrasp: The Design and Construction of a Cephalopod- Inspired Prosthetic Arm
Danny Stein Can Mealworms Compost Different Types of Foam, and What Type of Foam is Composted the Fastest
Stella Su Cardiac Gene Regulatory Programs in Mammalian Embryonic Development and Disease Risk Association
Aleksey Valouev An AI-Powered Network of Sensors with Wireless Data Transmission for Real-Time Wildfire Detection
Vince Wu Development of a Predictive Model of Honeybee Foraging Activity Under Different Climate Conditions
Amelia Yu Developing and Using a Novel Convolutional Neural Network Program to Discover and Confirm Exoplanets
Agastya Goel RSK – Completeness and Cycle Decompositions ATTACHMENTS:

None.

APPROVED BY:

Mahealani Ah Yun
Item 1
Item 1 Staff Report

Item 1: Staff Report
Pg.
2 Packet Pg. 7 of 263

City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: February 5, 2024
Report #:2401-2524
TITLE
Approval of Minutes from January 16, 2024 Meeting

RECOMMENDATION
That the minutes be reviewed and approved.

ATTACHMENTS
Attachment A: January 16, 2024 Draft Action Minutes
APPROVED BY:

Mahealani Ah Yun
Item 2
Item 2 Staff Report

Item 2: Staff Report
Pg.
1 Packet Pg. 8 of 263

CITY COUNCIL

DRAFT ACTION MINUTES

Special Meeting
January 16, 2024
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:30 P.M.

Present In Person: Burt, Kou, Lauing, Lythcott-Haims, Stone, Tanaka Present Remotely: Veenker

Absent:

Consent Calendar
Council Member Kou registered a no vote on Agenda Item Number 11, 12.

Council Member Tanaka registered a no vote on Agenda Item Number 4, 6, 10.

MOTION: Council Member Burt moved, seconded by Mayor Stone to approve Agenda Item Numbers 1-12.

MOTION PASSED ITEMS 1-3, 5, 7-9: 7-0
MOTION PASSED ITEMS 4, 6, 10: 6-1, Tanaka no
MOTION PASSED ITEMS 11-12: 6-1, Kou no

1. Approval of Minutes from December 11, 2023, December 18, 2023, and December 19, 2023 Meetings

2. Adopt an Ordinance to Expand the Public Art Commission (PAC) from Five to Seven Members; CEQA status - not a project

3. Approval of Contract Amendment Number 1 to Contract Number C24189060 with US Bank and its Wholly owned Subsidiary Elavon for General Banking and Merchant Services and Approval of Contract Amendment Number C24189061 with Wells Fargo for Lockbox Services; CEQA Status – Not a Project.

4. Approval of Professional Services Contract with Energy and Environmental Economics, Inc. (E3) for a Not-to-Exceed Amount of $945,286 for the Sustainability and Climate Action Plan (S/CAP) Funding Study; Amendment to Professional Services Contract with Sterling Communications, Inc. to Amend the Scope, Extend the Timeline, and Increase Total Not - to-Exceed Compensation by $75,000 (from $85,000 to $160,000); and a Budget Item 2
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16, 2024 Draft Action
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Draft Action Minutes: 01/16/2024
Amendment in the Electric Fund for Acceptance of $75,000 DEED grant for S/CAP Funding Study; CEQA Status – Not a Project.

5. Accept the City of Palo Alto’s Audited Financial Statements as of June 30, 2023 and the Macias, Gini & O’Connell Management Letter; Approve the FY 2023 Annual Comprehensive Financial Report (ACFR)and Amendments to the FY 2023 Budget in Various Funds; and Adopt a Resolution to Extend and Amend the Development Services Reserve Fund Policy, as Recommended by the Finance Committee; CEQA Status – Not a Project

6. Approval of Amendment No. 2 with Pets in Need Contract (C19174493) to extend the term through March 2024 and increase the compensation by $342,501 for operations of the Palo Alto Animal Shelter, for a Not -to-Exceed Amount of $4,431,872; CEQA status – not a project.

7. Adopt a Resolution Approving an Amendment to the City’s 2009 California- Oregon Transmission Project Long-Term Layoff Agreement to Extend the City’s Layoff of its Share of the California Oregon Transmission Project (COTP) until 2034 and to Receive Annual Market Payments as Recommended by the Utilities Advisory Commission (UAC); CEQA Status – Not a Project

8. Approval of Recommendations on Process for 2024 Council Priority Setting Retreat as Recommended by Policy & Services Committee (CEQA Status – Not a Project)

9. Approval of the Office of the City Auditor's Investment Management Audit Report as Recommended by the Policy & Services Committee (CEQA Status - Not a Project)

10. SECOND READING: Adoption of an Ordinance Amending Palo Alto Municipal Code (PAMC) Section 18.42.160 (Safe Parking) to Permanently Establish the Congregation -Based Safe Parking Program and Establishing Regulations Related to Safe Parking, Including a Maximum Number of Vehicles Per Night on Each Site (FIRST READING: December 4, 2023 PASSED 6-1, Tanaka no)

11. SECOND READING: Adoption of an Ordinance Amending Chapters 4.10 (Licenses Obtained by Application to Chief of Police), 4.30 (Soliciting Funds), and Chapter 4.32 (Soliciting Information for Commercial Purposes); and Adding Chapter 4.12 to Title 4 (Business Licenses and Regulations) of the Palo Alto Municipal Code to Comply With Updates to the Law, Including 2018 Senate Bill 946 (Sidewalk Vendors). CEQA status – categorically exempt. (FIRST READING: December 11, 2023 PASSED 5-1-1, Kou no, Veenker absent)

12. SECOND READING: Adoption of an Urgency Ordinance and an Interim Ordinance That Allows t he Director of Planning and Development Services to Extend Planning Entitlements for Housing Development Projects up to an Additional 18 Months.

Environmental Review: Exempt from CEQA in Accordance with CEQA Guidelines 15061(b)(3). (FIRST READING: December 11, 2023 PASSED 5-1-1, Kou no, Veenker absent) Item 2
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DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 01/16/2024

Action Items

13. Tree Protection Ordinance Year One Review and Recommendations; Adoption of an Ordinance Amending Chapter 8.04 (Street Trees, Shrubs, and Plants) and Chapter 8.10 (Tree Preservation and Management Regulations of the Palo Alto Municipal Code to Update the Allowable Reasons for Removal of Protected Trees, Make Clarifying Changes, and to Make Clerical Updates; and Adoption of a Resolution amending the Administrative Penalty Schedule to Incre ase the Penalties for Violations of Title 8 of the Palo Alto Municipal Code; CEQA Status – Not a Projects
MOTION: Council Member Kou moved, seconded by Vice Mayor Lauing to:
a. Adopt the proposed changes to Palo Alto Municipal Code amending Chapter 8.04 and Chapter 8.10 of the Palo Alto Municipal Code and adopt a resolution amending the Administrative Penalty Schedule to increase the penalties for violations of Title 8 of the Palo Alto Municipal Code; and
b. Adopt the changes proposed to Section 8.10.070 as addressed in the staff report; and c. Direct staff to engage with the community and through the Planning & T ransportation Commission for suggestions and proposals to educate and incentivize residents to maintain and increase our canopy including ways compatible with development.

MOTION PASSED: 5-2, Tanaka, Lythcott-Haims no

14. Approval of a Substation Improvement Agreement With Tesla Inc. to Install Improvements and Reserve Capacity at Hanover Substation, and Approval of a Fiscal Year 2024 Budget Amendment in the Electric Fund to Establish the Hanover Substation Upgrade Project (EL-24001); CEQA Status – Exempt under CEQA Guideline Sections 15301 and 15302
Council Member Veenker recused herself on Item 14.

MOTION: Council Member Tanaka moved, seconded by Council Member Lythcott-Haims to:

1. Approve and authorize the City Manager or their designee to execute the Substation Improvement Agreement (SIA) and attached Capacity Reservation Agre ement between the City of Palo Alto and Tesla for the design and construction of a substation improvements at the City of Palo Alto’s Hanover Substation (Attachment A).

2. Amend the Fiscal Year 2024 Budget Appropriation for the Electric Fund (requires a 2/3 vote) by:

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16, 2024 Draft Action
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DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 01/16/2024
a. Establish the Hanover Substation Upgrade Project (EL -24001) in the amount of $15,000,000; and
b. Decrease the Electric Fund Operations Reserve by $15,000,000.

MOTION PASSED: 6-1, Veenker recused

Adjournment: The meeting was adjourned at 8:16 P.M.

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16, 2024 Draft Action
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DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 01/16/2024
ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)

2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section

2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423 , the City Council
found action minutes and the video/audio recordings of Cou ncil proceedings to be the official records of both Council and committee proceedings. These recordings are available on the City’s website.

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16, 2024 Draft Action
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: February 5, 2024
Report #:2308-1858
TITLE
Review and Acceptance of Annual Report on Development Impact Fees for Fiscal Year 2023 and Adoption of a Resolution Making Statutory Findings for Certain Funds. CEQA status - Not a Project.

RECOMMENDATION
Staff recommends that the City Council review and accept the Annual Report on Development Impact Fees for the period ending June 30, 2023 (Attachment A) and adopt the resolution making statutory findings for certain development impact fee funds (Attachment B).

EXECUTIVE SUMMARY
This report contains information on the City of Palo Alto’s Development Impact Fees for the Fiscal Year (FY) 2022-23. This report meets the annual reporting requirements in Government Code section 66006.

BACKGROUND
Local agencies commonly impose fees on development projects to help offset the costs of funding the public facilities impacted by those developments. These fees are known as development impact fees. State law (Government Code section 66000 et seq. or “the Mitigation Fee Act”) requires local agencies that impose development impact fees to prepare an annual report providing specific information about those fees.

Within 180 days after the close of the fiscal year, the agency that collected the fees must make available to the public the following information regarding each fund or account:
 Brief description of the type of fee in the fund.
 Amount of the fee.
 Beginning and ending balance in the fund.

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 Amount of fees collected, and interest earned.
Identification of each public improvement on which fees were expended and the amount of the expenditure on each improvement, including the total percentage of the cost of the public improvement that was funded with fees.
Identification of an approximate date by which the construction of a public improvement will commence, if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement. Description of each interfund transfer or loan made from the account or fund, including the public improvement on which the loaned funds will be expended, and in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan.
Amount of any refunds made due to inability to expend fees within the required time frame.

The Mitigation Fee Act further requires that the City Council review the annual report at its first regularly scheduled public meeting not less than 15 days after the information is made available to the public.

In addition to the annual reporting requirement, the Mitigation Fee Act requires, for the fifth fiscal year following the first deposit into the fund and every five years thereafter, that the City Council make findings with respect to any portion of the fee(s) remaining unexpended, whether committed or uncommitted. The findings must:
Identify the purpose to which the fee is to be put;
Demonstrate a nexus between the fee and the purpose for which it was originally charged; and
Identify all sources and amounts of funding anticipated to complete financing of incomplete improvements
Designate the approximate dates on which the anticipated funding is expected to be deposited into the fund.

If the agency no longer needs the funds for the purposes collected, or if the agency fails to make required findings, or to perform certain administrative tasks prescribed, the agency may be required to undertake a refunding process as set forth in the statute.

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ANALYSIS
Annual Report (Government Code section 66006)
The annual report for FY 2023 is included as Attachment A. Staff published the report on the City’s website on December 29, 2023. The report contains the statutorily required information for the following fees:
Stanford Research Park/El Camino Real traffic impact fees (PAMC Ch. 16.45): Fee for new nonresidential development in the Stanford Research Park/El Camino Real Service Commercial zone, to fund capacity improvements at eight intersections. The City ceased collecting effective fiscal year 2020.
San Antonio/West Bayshore Area traffic impact fees (PAMC Ch. 16.46): Fee for new nonresidential development in the San Antonio/West Bayshore area to fund capacity improvements at four intersections. The City ceased collecting effective fiscal year 2020. Housing impact fees imposed on commercial developments (PAMC Ch. 16.65): Fee on commercial and industrial development to contribute to offset the demand that new jobs create for low income and moderate-income in the City.
General Government facilities: (PAMH Ch. 16.58) – Fee on residential and non-residential development to fund facilities associated with municipal administration. Parks, Community Centers, and Libraries impact fees (PAMC Ch. 16.58): Fee on new residential and non-residential development to provide community facility funds for parks, community centers, libraries, public safety, and general government. Residential (Rental) impact fees (PAMC Ch. 16.65) Fee on rental residential developments (including mixed use with rental housing) to offset the demand that new market-rate rental housing creates for low and moderate-income housing in the City. Charleston-Arastradero Corridor pedestrian and bicyclist safety fees (PAMC Ch. 16.60):

Fee on new development and re-development within the Charleston-Arastradero Corridor to provide for pedestrian and bicyclist improvements. Citywide Transportation impact fees (PAMC Ch 16.59): Fee on development in all parts of the City to fund transportation projects and programs to reduce congestion. New Public Safety facilities (PAMH Ch. 16.58): Fee on residential and non-residential development to fund police and fire facilities, including fire apparatus and vehicles. University Avenue Parking In-Lieu Fund (PAMC Ch. 16.57): Fees collected from non- residential development within the University Avenue Parking Assessment District, in lieu of providing the required number of parking spaces.
Residential housing in-lieu fees (PAMC Ch. 16.65): Fee on residential developments in-lieu of providing required below-market rate units to low- and moderate-income households.

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And in the interest of transparency, the report includes also includes information for the following funds, although the Mitigation Fee Act’s reporting requirements do not apply:
Residential housing in-lieu fees (PAMC Ch. 16.65): Fee on residential developments in-lieu of providing required below-market rate units to low-and moderate-income households. Public Art Fund (PAMC Ch. 16.61): Fees imposed on new commercial developments (including mixed use projects), including new construction, remodels, additions and reconstruction that (i) have a floor area of 10,000 sq. ft. or more, and (ii) have a value of $200,000 or more, exclusive of costs for architecture, design, engineering, and required studies; and all new residential projects of five or more units to fund art for private developments.
Parkland Dedication (CA Government Code Section 66477-Quimby Act): Fees on parkland dedication imposed on new residential and non-residential development. Water and Wastewater Collection (California Government Code Section 66000): Capacity fees charged to developers that are adding load to the water and sewer systems effective July 1,2005.

Five-Year Findings (Government Code section 66001)
Five of the development impact fees imposed by City are due for the additional five-year findings in FY2022-23. These proposed findings are contained in Attachment B. The Stanford Research Park/ El Camino Fund has an unexpended balance of $1,220,842 that was collected prior to FY 2023.
The San Antonio/West Bayshore Fund has an unexpended balance of $407,697 that was collected prior to FY 2023.
The Commercial Housing Impact Fee Fund has an unexpended balance of $2,228,048 that was collected as of FY 2023.
The Citywide Transportation Fund has an unexpended balance of $1,622,961 that was collected as of FY 2023.
The University Avenue Parking In-Lieu Fund has an unexpended balance of $15,664,946 that was collected in FY 2023 and prior.

FISCAL/RESOURCE IMPACT
There is no direct fiscal impact associated with the review and acceptance of the annual report (Attachment A). The various fee funds are reviewed annually for any unallocated or unexpended balances as part of the development of the City’s five-year capital improvement plan.

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If the council does not adopt the proposed resolution (Attachment B) making the five-year findings, then City may be required undertake the refund procedures described in Government Code section 66001(e). The total potential refund across the five development impact fees at issue is $21,144,494.

STAKEHOLDER ENGAGEMENT
This report has been prepared by the Accounting Division in Administrative Services and reviewed by partner departments including the City Attorney’s Office and the Planning and Development Services Department.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by the California Environmental Quality Act (CEQA) in that the report and findings required by the Mitigation Fee Act is a government fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4).

ATTACHMENTS
Attachment A: FY 2023 Development Impact Fee Report Use of Fee Summary Attachment B: Resolution of the Council of the City of Palo Alto Accepting the Development Impact Fee Report for the Period Ending June 30, 2023 and Making Findings Regarding the Continuing Need for Development Impact Fees Collected but Not Expended
APPROVED BY:

Kiely Nose, Assistant City Manager/Administrative Services Director Item 3
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City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
Stanford Research Park/El Camino Real
Transportation Impact Fee
San Antonio/West Bayshore Area
Transportation Impact Fee
Description of the Type of Fee Traffic impact fees imposed on new non‐residential development in the Stanford Research Park/El Camino Real CS zone to fund improvements at eight identified
intersections. (PAMC 16.45)
Traffic impact fees imposed on new non‐residential
development in the San Antonio/West Bayshore Areas to
fund capacity improvements at four identified intersections. (PAMC 16.46)
$12.85 per square foot; City ceased collecting effective FY 2020
$2.65 per square foot; City ceased collecting effective FY 2020Amount of the Fee
Fund Balance July 1, 2022 1,147,182 407,407
FY 2023 Activity
Revenues
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues
24,157
49,503
73,660
8,625
(8,335)
290
Expenditures 0 0
Total Expenditures 0 0
Ending Balance June 30, 2023 1,220,842 407,697
Reserves 0 0
Total Reserves 0 0
Net Funds Available 1,220,842 407,697
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Attachment A - FY 2023
Development Impact Fee
Annual Report Use of Fee
Summary

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City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
Commercial Housing
Impact Fee General Government Facility Development Fee
Description of the Type of Fee Fees imposed on commercial and industrial development to offset the demand that new jobs create for low and
moderate‐income housing in the City; fees collected support various levels of affordable housing projects. (PAMC 16.65) Fees imposed on residential and non‐residential
development to fund facilities associated with municipal administration. (PAMC 16.58)
Amount of the Fee Hotel / Retail / Other Residential:

Non‐Residential:$24.97 per sq. ft. Single family $1,600 per unit Multi‐family $1,279 per unit
(ADUs under 750 sq. ft. exempt);Office/R&D: $74.01 per sq. ft.

Non‐residential:

Commercial $892 per 1,000 sq. ft. or fraction thereof
Industrial $300 per 1,000 sq. ft. or fraction thereof
Office/Institutional $1,192 per 1,000 sq. ft. or fraction thereof
Fund Balance July 1, 2022 27,113,503 111,930
FY 2023 Activity
Revenues
Fees Collected 0
73,411
(115,201)
(41,790)
11,592
2,504
(4,861)
9,235
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues
Expenditures
Salaries and Benefit
Liability Insurance
Total Expenditures
(36,872)
(1,230)
(38,102)
0 0
0 Ending Balance June 30, 2023 27,033,611 121,165
Reserves
Notes Receivable (see detail below)
Reappropriations
Total Reserves
(23,629,563)
(1,176,000)
(24,805,563)
0 0
0 Net Funds Available 2,228,048 121,165
Notes Receivable Detail:
$1,290,000 for 2811 Alma; $4,137,254 for 801 Alma;
$7,700,000 for Buena Vista Mobile Home Park; $10,502,309 Wilton Court
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Attachment A - FY 2023
Development Impact Fee
Annual Report Use of Fee
Summary

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City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
Community Facilities Community Facilities
Parks Development Fee Community Centers Development Fee Description of the Type of Fee
Amount of the Fee
Fees imposed on new residential and non‐residential
development approved after Jan 28, 2002 for Parks. (PAMC

16.58)
Fees imposed on new residential and non‐residential
development approved after Jan 28, 2002 for Community
Centers. (PAMC 16.58)
Residential: Single family $62,039.67 per unit. (ADUs under 750 sq ft exempt)
Residential: Single family $4795.06 per unit.
(ADUs under 750 sq ft exempt); Multi‐Family $3,547.13 per unit
Non‐residential: Commercial/Industrial $18,190 per net new 1,000 sq ft; Hotel/Motel $3,100 per 1,000 sq ft. Non‐residential: Commercial/industrial $1410 per 1,000 sq ft; Hotel/Motel $240 per 1,000 sq ft.

Fund Balance July 1, 2022 3,810,535 739,193
FY 2023 Activity
Revenues
Fees Collected 439,967
63,760
7,825
34,559
16,041
(18,174)
32,426
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues 511,552
Expenditures
Operating Transfer to Capital Projects Fund
Total Expenditures
(2,650,333)
(2,650,333)
0 0
Ending Balance June 30, 2023 1,671,754 771,619
Reserves 0
Total Reserves 0 0
Net Funds Available 1,671,754 771,619
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Attachment A - FY 2023
Development Impact Fee
Annual Report Use of Fee
Summary

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City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
Community Facilities
Library Development Fee
Residential Housing
Impact Fee
Description of the Type of Fee Fees imposed on new residential and non‐residential development approved after January 28, 2002 for Libraries. (PAMC 16.58)
Fees imposed on all rental residential developments
(including mixed‐use with rental housing) to offset the demand that the new market‐rate rental housing creates for low‐income and moderate‐income housing in the City.
(PAMC 16.65)
Amount of the Fee Residential: Single family $2,857.80 per unit; Multi‐family Single and Multi‐Family: $24.52 per sq. ft. apartment $2,113.37 per unit (ADUs under 750 sq ft exempt) (rentals) Non‐residential: Commercial/industrial $840 per net new 1,000 sq ft. Hotel/Motel $140 per net new 1,000 sq ft.

Fund Balance July 1, 2022 931,093 1,057,616
FY 2023 Activity
Revenues
Fees Collected 20,398
12,949
(20,398)
12,948
0 22,402
(29,041)
(6,639)
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues
Expenditures 0
Total Expenditures 0 0
Ending Balance June 30, 2023 944,041 1,050,978
Reserves
Reserve for Reappropriations
Total Reserves
0 0
(600,000)
(600,000)
Net Funds Available 944,041 450,978
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Attachment A - FY 2023
Development Impact Fee
Annual Report Use of Fee
Summary

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City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
Charleston‐Arastradero Corridor
Pedestrian and Bicyclist Safety Impact Fee
Citywide Transportation
Impact Fee
Description of the Type of Fee Transportation impact fees imposed on new development in all parts of the City to fund congestion reduction projects. (PAMC 16.59)
Fees collected from new development and redevelopment
within the Charleston‐Arastradero Corridor to provide for pedestrian and bicyclist safety improvements. (PAMC 16.60) Amount of the Fee Residential: $1,599 per residential unit $9,266 each; per net new PM peak hour trip Commercial: $0.46 per sq ft (ADUs exempt)
Fund Balance July 1, 2022 34,904 1,999,269
FY 2023 Activity
Revenues
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues
474
794
1,268
37,798
(19,106)
18,692
Expenditures
Operating Transfer to Capital Projects Fund
Total Expenditures
(35,000)
(35,000)
(395,000)
(395,000)
Ending Balance June 30, 2023 1,172 1,622,961
Reserves 0
Total Reserves 0 0
Net Funds Available 1,172 1,622,961
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Attachment A - FY 2023
Development Impact Fee
Annual Report Use of Fee
Summary

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City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
University Avenue Non‐Residential Development
Parking In‐Lieu FeePublic Safety Facility Development Fee Description of the Type of Fee
Amount of the Fee
Fees imposed on residential and non‐residential
development to fund police and fire facilities (including fire apparatus and vehicles) (PAMC 16.58)
Fees collected from non‐residential development within the University Avenue Parking Assessment District area in lieu of providing the required number of parking spaces. (PAMC

16.57)
$124,275.00 per spaceResidential: Single family $1,269 per unit; Multi‐family $1,015 per unit
Nonresidential: Commercial $709 per 1,000 sq ft. or fraction thereof; Industrial $237 per 1,000 sq. ft. or fraction thereof; Office/Institutional $946 per 1,000 sq ft or fraction thereof.

Fund Balance July 1, 2022 87,770 6,019,034
FY 2023 Activity
Revenues
Fees Collected 9,194
1,965
(3,837)
7,323
10,066,275
226,347
(554,310)
9,738,312
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues
Expenditures
Operating Transfer to Capital Projects Fund
Total Expenditures
0 0
(92,400)
(92,400)
Ending Balance June 30, 2023 95,093 15,664,946
Reserves 0 0
Total Reserves 0 0
Net Funds Available 95,093 15,664,946
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Attachment A - FY 2023
Development Impact Fee
Annual Report Use of Fee
Summary

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City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
(INFORMATION ONLY)
Residential Housing In‐Lieu Fee
(INFORMATION ONLY)
Parkland Dedication Fee
Description of the Type of Fee This fee is not subject to AB1600 reporting requirements and is included only for information purposes. Fees
collected from ownership residential developments of three or more units(including mixed used with ownership in
housing) in‐lieu of providing the required below‐market rate unit(s) to low and moderate income households. (PAMC

16.65)
This fee is not subject to AB1600 reporting requirements and is included only for information purposes. Fees on
parkland dedication imposed on new residential and non‐ residential development.

Govt Code Sec. 66477 (Quimby Act)
Amount of the Fee Single‐family $91.92 per sq. ft. single‐family detached; $61.28 per sq. ft. single‐family attached. Multi‐family $61.29 per sq. ft. condos.

Single Family: $75,076.89 per unit; Multi‐Family: $51,747.91 per unit. This applies only to residential projects that require a subdivision or parcel map. Land dedication is required for subdivisions resulting in more than 50 parcels. Parkland Dedication Fee ‐Land: Single Family: 531 sq. ft. per unit; Multi‐Family: 366 sq. ft. per unit. When parkland dedication applies, park impact fees do not apply.

Fund Balance July 1, 2022 29,466,762 3,779,395
FY 2023 Activity
Revenues
Fees Collected 49,043
277,887
(118,885)
208,045
0 56,765
54,249
111,014
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues
Expenditures
Salaries and Benefits
Liability Insurance
(36,872)
(1,230)
Program & Project Consultants
Operating Transfer to Capital Projects Fund
Total Expenditures
(316,136)
(1,650,000)
(1,650,000)(354,238)
Ending Balance June 30, 2023 29,320,569 2,240,408
Reserves
Encumbrances (5,746)
(3,000,000)
(23,758,078)
(26,763,824)
Reappropriations
Notes Receivable (details below):

Total Reserves 0
Net Funds Available 2,556,745 2,240,408
Residential Housing In‐Lieu Fund, Detail for Notes Receivable:
$375,000 for 3053 Emerson; $3,504,850 for Tree House Apts.; $747,734 for Sheridan Apts.; $2,285,026 for 801 Alma; $848,386 for Palo Alto Housing Project; $593,952 for 2811‐2825 Alma St.; $203,561 for Colorado Park Housing; $149,968 for El Dorado Palace; $6,800,000 for Buena Vista Mobile Home Park; $8,249,601 for Wilton Ct.

Item 3
Attachment A - FY 2023
Development Impact Fee
Annual Report Use of Fee
Summary

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City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
(INFORMATION ONLY)
Public Art In‐Lieu Fee Water and Wastewater Collection Capacity Fee Description of the Type of Fee This fee is not subject to AB1600 requirements and is included in this report only for information purposes. Fees imposed on new commercial developments (including mixed use projects), including new construction, remodels,
additions and reconstruction that (i) have a floor area of 10,000 sq. ft. or more, and (ii) have a construction value of $200,000, or more, exclusive of costs for architecture, design, engineering, and required studies; and all new residential projects of five or more units to fund public art for private developments. (PAMC 16.61)
The water and wastewater collection system capacity fees are used to buy into existing water distribution and
wastewater collection systems and to recover the
proportionate cost of system improvements required to
serve the new customers of increased loads of existing
customers. These are one‐time fees paid before the water or wastewater services are upgraded or installed. Utility
capacity fees received are placed in a special fund and used exclusively for water and sanitary sewer capital improvement projects.

Amount of the Fee 1% of first $120.25 million construction valuation and 0.9% of construction valuation for valuation in excess of $120.25 million
Water Capacity Fees: 5/8 in., 3/4 in E‐Meter. $3,750, 1 in. E‐ Meter $6,250, 1 1/2 in. E‐Meter $18,850, 2 in. E‐Meter
$31,250, 4 in. Compound Meter by est. $125/FU (min. 5,000 FU) , 6 in. Compound Meter by est. $125/FU (min. 7,000 FU) Fire Service Capacity Fees: 2 in. $750, 4 in. $8,425, 6 in. $18,250, 8 in. $30,950, 10in. $48,110
Sewer Capacity Charges: 4 in. connection with 5/8 in Water Meter (WM) $5,250, 4 in connection. with 1‐in WM $10,500, 4 or 6 in. connection with 1‐1/2 in WM $31,668, 6 in.
connection with 2 in. WM $52,500, 6 in. and larger
connection with 4 in. or larger WM by est. at $210/FU
Fund Balance July 1, 2022 1,925,710
FY 2023 Activity
Revenues
Fees Collected
Interest Earnings
261,001
42,512
Unrealized Gain/(Loss) Investments
Operating Transfer from General Fund
Capacity Fees Collected ‐ Water
Total Revenues
(48,425)
184,000
131,275
131,275439,088
Expenditures
Salaries and benefits
Other Contract Services
Liability Insurance
Total Expenditures
(255,040)
(16,000)
(2,324)
(273,364)
Ending Balance June 30, 2023 2,091,434
Reserves
Other Commitments/Appropriations
Total Reserves
(40,000)
(40,000)
Net Funds Available 2,051,434
Item 3
Attachment A - FY 2023
Development Impact Fee
Annual Report Use of Fee
Summary

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City of Palo Alto
FY 2023 Use of Fees Summary
% of Total
Fee Fund FY 2023 Expenditures (Actual) FY 2023 Interfund Transfers Project Cost Construction Start Date Stanford Research Park/El Camino Real Traffic Impact Fee None in FY 2023
None in FY 2023
None in FY 2023
None in FY 2023
None in FY 2023

N/A N/A
San Antonio/West Bayshore Traffic Impact Fee
Commercial Housing Impact Fee
36%
N/AExpended $38,000 directly in the
Commercial Housing Impact Fee
Fund, related to staffing costs and
internal costs to support housing
grant work for Permanent Local
Housing Allocation (PLHA)
N/A
Entitlement Funding and Local
Housing Trust Fund (LHRF).

General Government Facilities
None in FY 2023 None in FY 2023 N/A N/A
Community Facilities ‐ Parks Development Fee
Boulware Park (PE‐17005) $343,580 in Capital Project Fund $237,280 in Capital Project Fund
$143,530 in Capital Project Fund
$1,930,000 to Capital Project Fund
$383,633 to Capital Project Fund
$336,700 to Capital Project Fund
36%
4%
Construction scheduled to
commence summer 2024.

Phase 1 construction began fall 2021.Rinconada Park (PE‐08001) Park Restroom Installation (PG‐19000) 36% FY 2024, with additional projects beginning in FY 2026 and FY 2028
Community Facilities ‐ Community Centers Development Fee Community Facilities ‐ Library Development Fee
Residential Housing Impact Fee
None in FY 2023 None in FY 2023
None in FY 2023
N/A
N/A
N/A
N/ANone in FY 2023
Item 3
Attachment A - FY 2023
Development Impact Fee Annual
Report Use of Fee Summary

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City of Palo Alto
FY 2023 Use of Fees Summary
% of Total
Project Cost
N/A
Fee Fund FY 2023 Expenditures (Actual)
None in FY 2023
FY 2023 Interfund Transfers
None in FY 2023
Construction Start Date
N/A
Charleston‐Arastradero Corridor Pedestrian and Bicyclist Safety Charleston/Arastradero Corridor Project (PE‐13011) $35,000 in Capital Project Fund $35,000 to Capital Project Fund $395,000 to Capital Projects Fund
1% Phases 1 and 2 began June 2018
Citywide Transportation
Traffic Signal and Intelligent Transportation (PL‐05030 ) $232,810 in Capital Project Fund 42% Project start was circa FY 2005. Fee funds used for ongoing upgrades to
the City's comprehensive traffic
management system, including traffic
signal equipment and on‐call traffic
design/engineering services.

Public Safety Facility Development Fee
None in FY 2023
None in FY 2023
None in FY 2023 N/A
95%
N/A
University Avenue Parking In‐Lieu Fee
New Downtown Parking Garage (PE‐15007) $92,000 to Capital Project Fund Project currently in planning and design. Construction start date is
TBD.

Residential Housing In‐Lieu Fee Fund
Expended $38,000 directly in the
Residential Housing In‐Lieu Fee Fund,
related to staffing costs and internal
costs to support housing grant work
for PLHA and LHRF and Below Market
Rate (BMR) administration.

Parkland Dedication
None in FY 2023
None in FY 2023
None in FY 2023
None in FY 2023
None in FY 2023
None in FY 2023
N/A
N/A
N/A
N/A
N/A
N/A
Public Art Fund
Water and Wastewater Collection
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Attachment A - FY 2023
Development Impact Fee Annual
Report Use of Fee Summary

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*NOT YET APPROVED*
Resolution No. _____
Attachment B
Resolution of the Council of the City of Palo Alto Accepting the Development Impact Fee Report for the Period Ending June 30, 2023 and Making Findings Regarding the Continuing Need for Development Impact Fees Collected but Not Expended

R E C I T A L S
A. Government Code Sections 66000 et seq., commonly known as the Mitigation Fee Act, regulates the imposition, collections, expenditure, and reporting of development impact fees; and
B. Government Code Section 66006 requires that certain information be made available to the public regarding development impact fees on an annual basis; and C. Government Code Section 66001 requires the City Council to make findings describing the continuing need for impact fees every five years specifying the intended use of any unexpended impact fees; and
D. The City of Palo Alto imposes various development impact fees, and has prepared the Development Impact Fee Report for the Period Ending June 30, 2023, which contains the information required by Government Code 66006 for these fees; and E. The City of Palo Alto also imposes in-lieu fees and dedication fees in connection with development projects and although the Mitigation Fee Act’s requirements do not apply to these fees, the Development Impact Fee Report for the Period Ending June 30, 2023 includes information regarding those fees in its annual report in the interest of transparency.

F. The Development Impact Fee Report for the Period Ending June 30, 2023 was published on the City of Palo Alto website on December 29, 2023.

G. The City Council has read and considered the Development Impact Fee Report for the Period Ending June 30, 2023.

The Council of the City of Palo Alto RESOLVES as follows:

Section 1. The City Council accepts the Development Impact Fee Report for the Period Ending June 30, 2023 as required by Government Code 66006.

Section 2. Based on the Development Impact Fee Report for the Period Ending June 30, 2023, and the Schedule of Improvements and Expenditures attached as Exhibit 1 to this resolution, the City Council makes the following findings as required by Government Code Section 66001 with regard to fees collected but not expended for the following development impact fees:
1 0003_20240125_ca29
Item 3
Attachment B -
Resolution Accepting the
Development Impact Fee
Report for the Period
Ending 06-30-2023 and
Making Findings Re the
Continuing Need for
Development Impact Fees
Collected but Not
Expended

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*NOT YET APPROVED* Attachment B
Stanford Research Park/El Camino Real Traffic Impact Fee A. The purpose of this fee is to fund traffic-related improvements at eight designated intersections within the Stanford Research Park/El Camino Real CS zone.

B. The fee is reasonably related to its purpose because the fee is imposed on new non- residential development, which is expected to generate an average of eighty percent of new commute period traffic at the designated intersections, and the amount of the fee is based upon the estimated cost of the capacity improvements at the designated intersections.

C. The sources and amounts of funding anticipated for incomplete improvements is set forth in Exhibit 1 to this resolution.

D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit 1 to this resolution.

San Antonio/West Bayshore Area Traffic Impact Fee
A. The purpose of this fee is to fund the cost of capital expenditures needed to provide operational improvements at certain intersections in the San Antonio/West Bayshore Area.

B. This fee is reasonably related to its purpose because the fee is imposed on new development in the San Antonio/West Bayshore Area, and the San Antonio/West Bayshore Environmental Impact Report (EIR) showed that these improvements are necessary to mitigate the demonstrated significant traffic impacts of such new development.

C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit 1 to this resolution.

D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit 1 to this resolution.

Citywide Transportation Impact Fee
A. The purpose of this impact fee is to fund the cost of citywide transportation enhancements, or public facilities and services that relieve citywide traffic congestion caused by new development projects.

B. The fee is reasonably related to its purpose because the fee is imposed on development projects that cause traffic congestion on a citywide basis, calculated based on the additional traffic impacts attributable to the project, and fee funds are used only on eligible citywide transportation enhancements.

C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit 1 to this resolution.

D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit 1 to this resolution. 2 0003_20240125_ca29
Item 3
Attachment B -
Resolution Accepting the
Development Impact Fee
Report for the Period
Ending 06-30-2023 and
Making Findings Re the
Continuing Need for
Development Impact Fees
Collected but Not
Expended

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*NOT YET APPROVED* Attachment B
University Avenue Parking In-Lieu
A. The purpose of this fee is to fund the cost of providing public parking facilities to serve nonresidential development within the University Avenue parking assessment district area that does not provide adequate new off-street parking spaces to satisfy the requirements of the zoning code.

B. The fee is reasonably related to its purpose because the fees will be used for the construction of additional public parking spaces within the University Avenue parking assessment district area.

C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit 1 to this resolution.

D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit 1 to this resolution.

In addition to the estimated expenditures stated in Exhibit 1, the City has also allocated $1.3 million of the unexpended fund balance for resolution of pending litigation (Hamilton and High, LLC, et al. v. City of Palo Alto, et al. Case No. 20CV366967, Superior Court of California, Santa Clara County).

Commercial Housing Impact Fee Fund
A. The purpose of this fee is to offset the demand that new jobs create for low and moderate-income housing in the city as a result of commercial and industrial development by supporting below-market rate housing at various levels of affordability.

B. The fee is reasonably related to its purpose because the fees are expended exclusively to provide housing affordable to very low income, lower income, and moderate income households in the city, consistent with the goals and policies contained in the City's housing element and for administration and compliance monitoring of the City’s affordable housing program.

C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit 1 to this resolution.

D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit 1 to this resolution. //
//
//
//
//
3 0003_20240125_ca29
Item 3
Attachment B -
Resolution Accepting the
Development Impact Fee
Report for the Period
Ending 06-30-2023 and
Making Findings Re the
Continuing Need for
Development Impact Fees
Collected but Not
Expended

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*NOT YET APPROVED* Attachment B
SECTION 3. The Council finds that adoption of this resolution is not a project as defined by the California Environmental Quality Act (CEQA) in that it is a fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4).

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:
__________________________
City Clerk
_____________________________
Mayor
APPROVED AS TO FORM: APPROVED:
__________________________
Chief Assistant City Attorney
_____________________________
City Manager
_____________________________
Director of Administrative Services
4 0003_20240125_ca29
Item 3
Attachment B -
Resolution Accepting the
Development Impact Fee
Report for the Period
Ending 06-30-2023 and
Making Findings Re the
Continuing Need for
Development Impact Fees
Collected but Not
Expended

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Exhibit 1 Schedule of Improvments and Expenditures
Amount and Approximate Dates of Funding to be Deposited FY 2023 and Prior FY 2024 FY 2025 FY 2026 FY 2027Improvement/Public Facility Funding Source FY 2028 Additional Funding Sources; Notes Traffic Signal and Intelligent Transporation Refer to City of Palo Alto FY 2024 Systems (PL-05053) San Antonio/W. Bayshore Impact Fee Fund $ $
$
$
900,000
900,000
Adopted Capital Budget, pp. 330-331
San Antonio/Charleston intersection
improvements (PE-86070)
Refer to City of Palo Alto FY 2024
Adopted Capital Budget, pp. 290-291San Antonio/W. Bayshore Impact Fee Fund San Antonio/W. Bayshore Impact Fee Fund
$
$
400,000
Refer to City of Palo Alto FY 2024
Adopted Capital Budget, pp. 290-291San Antonio Overpass (PE-86070) 900,000 Refer to City of Palo Alto FY 2024
Adopted Capital Budget, pp. 304-305Churchill Ave Enhanced Bikeway (PL-14000) Citywide Traffic Impact Fee Fund 1,000,000 Traffic Signal and Intelligent Transportation
Systems (PL-05030)
Refer to City of Palo Alto FY 2024
395,000 Adopted Capital Budget, pp. 330-331
Refer to City of Palo Alto FY 2024
Citywide Traffic Impact Fee Fund $ 395,000 395,000 $ 395,000 $ 395,000 $ Adopted Capital Budget, pp. 158-159.

In December 2023, the City Council
directed staff to resume work on the
Downtown Parking Garage project in
conjunction with the development of
affordable housing on City-owned
parking lots. Project budget, funding
amounts and dates will be updated in
the FY 2025-2029 Capital Improvement
Downtown Parking Garage (PE-15007)
2811 Alma Street
Downtown Parking In-Lieu Fee Fund
Commercial Housing Impact Fee
Commercial Housing Impact Fee
$
$
$
1,300,000
1,290,000
4,137,254
$ 5,448,600 Program.

Affordable housing units managed by
Alta Housing
Affordable housing units managed by
Eden Housing Management801 Alma Street
Affordable housing units managed by
Buena Vista Mobile Home Park
Wilton Court
Commercial Housing Impact Fee
Commercial Housing Impact Fee
$
$
7,700,000 Santa Clara County Housing Authority
Affordable housing units managed by
Alta Housing10,502,309
The Planning and Development
Services Department will be releasing
a notice of funding availability (NOFA)
in February 2024 and remaining
funding should be allocated in FY 2024;
a minimum balance will be maintained
to account for unrealized losses as
these funds are invested until the time
of disbursement.

Project constructed in partnership
Community Development Block Grant-
additional eligible affordable housing
units/affordable housing program
expenditures Commercial Housing Impact Fee $2,000,000
Page Mill Road/Hanover Street Intersection Stanford Research Park/El Camino Real Traffic Improvements Impact Fee $2,200,000 with County of Santa Clara Project to be constructed in
partnership with County of Santa Clara
with tenative construction start in FYPage Mill Road/El Camino Real Intersection Stanford Research Park/El Camino Real Traffic Improvements Impact Fee $1,000,000 2026
Funding amounts and dates will be
Traffic Signal and Intelligent Transportation Stanford Research Park/El Camino Real Traffic Systems (PL-05030) Impact Fee
updated in the FY 2025-2029 Capital
$50,000 Improvement Program.$50,000 $50,000 $50,000
Item 3
Attachment B - Resolution Accepting
the Development Impact Fee Report
for the Period Ending 06-30-2023
and Making Findings Re the
Continuing Need for Development
Impact Fees Collected but Not
Expended

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: February 5, 2024
Staff Report: 2312-2339
TITLE
Approval of Amendment Number 1 to Contract Number S21180652 With Eric Gouldsberry Art Design (EGAD), in the Amount of $170,000 for Graphic Design Services to Extend the Term for Additional Two Years; for a Total Not-to-Exceed Amount of $410,000 over the Five-year Term; CEQA Status – Not a Project

RECOMMENDATION
Staff recommends that Council:

1. Approve and authorize the City Manager or designee to execute Amendment No. 1 to contract S21180652 (Attachment B) with Eric Gouldsberry Art Design (EGAD) for the continued provision of on-call graphic design services, to extend the term for an additional two years in an amount not-to-exceed $170,000, for a revised total contract not-to-exceed amount of $410,000 over the five-year term of the agreement. There are no changes to compensation rates listed in Exhibit C-1 of the original contract (Attachment A).

On January 21, 2021, Staff entered into a contract agreement with Eric Gouldsberry Art Design (EGAD) for graphic design services for the Utilities Department. This was a three-year contract term in the amount of $80,000 per year for a total not to exceed amount of $240,000. The contract expires January 22, 2024. Staff recommend amending the contract and extending the term for another two years in the amount of $85,000 per year, with a total not to exceed amount $170,000, to continue graphic design services for the Utilities Department.

BACKGROUND
The City of Palo Alto Utilities (CPAU) is responsible for communication and outreach to its more than 29,000 utility customers for critical Utilities management and operations. This includes:
utility billing, capital improvement, infrastructure operations and maintenance, rates and financial information, and safety. Federal and State requirements and local City Council policies dictate the need for energy and water efficiency savings programs, as well as greenhouse gas emissions reductions through sustainability and climate action, electrification for homes and Item 4
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buildings, electric transportation (vehicles including cars, bikes, etc.), and educational programs such as workshops and community outreach events.

These programs and services are intended to reach all sectors of Palo Alto’s population including residents, businesses, institutional and industrial customers. Graphic design services required for these communication efforts include CPAU’s traditional outreach: utility bill inserts, flyers, brochures, and illustrative reports, print and digital ads, social media, newsletters, website; as well as dynamic media content including videos. The City does not have in-house staff capable of meeting these needs.

CPAU’s mission is to provide safe, reliable, cost-effective, and sustainable services. Safety is a top priority and CPAU is required by Federal and State agencies to implement robust public awareness plans and outreach campaigns for safety through its communication channels. Public information addresses the safety of operations and maintenance for our infrastructure, reliability, and quality of our resource supplies, and informs customers of their responsibilities to act safely around utilities infrastructure. Another primary area of focus is on CPAU’s financial costs, revenues, and utility rates. CPAU continually strives to communicate the value of safe, reliable, and quality utility resources CPAU procures and delivers to meet customer needs. CPAU is implementing new technologies that directly impact customers such as advanced metering infrastructure (AMI) for utility billing and efficiency, an enhanced power outage management system, and fiber-to-the-premises (FTTP) for residential and commercial customers.

In April 2016, the Palo Alto City Council adopted an aspirational greenhouse gas (GHG) emissions reduction goal of 80% below 1990 levels by 2030 (80x30). In October 2022, City Council passed an ambitious carbon neutrality by 2030 goal, building on 80x30. In June 2023, City Council adopted the 2022 Sustainability and Climate Action Plan (S/CAP), prioritizing several initiatives for community programs. As of 2021, Palo Alto’s GHG emissions were 54% below 1990 levels.

Primary paths utilized by the Utilities Department to contribute toward these sustainability goals include managing a progressive Renewables Portfolio Standard with a 100% carbon neutral electric supply, carbon neutral gas portfolio, energy and water efficiency programs, educational services, and programs for beneficial electrification of homes and buildings, and adoption of electric vehicles (EVs).

CPAU offers education and outreach about services and customer programs including but not limited to the following topics:
•Customer service, billing, and meter reading
•Utilities safety, infrastructure capital improvement, operations, and maintenance •Resiliency
•Utilities rates
•Energy (gas and electric) conservation and efficiency
•Water supply, quality, conservation, and efficiency
•Renewable energy
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•Electrification and sustainability
CPAU anticipates launching new programs in the next several years to achieve goals for sustainability and climate action. Several programs will target beneficial electrification for small-to-medium businesses, and commercial, institutional, and industrial customers. CPAU is continually evaluating ways to scale up or enhance existing programs to drive greater participation, allowing us to meet mandates or goals for energy and water efficiency and GHG reductions.

Regulatory requirements are expanding to increase public awareness about utilities safety, infrastructure projects, and resource supply management. Staff are finding it necessary to provide more outreach and notifications to customers on these issues. With the vast number of programs and services currently offered by CPAU, as well as augmented programs and public awareness requirements, professional graphic design services are critical to enable CPAU to meet these communication needs.

Bid Process
The City issued a Request for Proposal through PlanetBids on October 15, 2020 to identify providers with experience working with municipal utilities to provide graphic design services.

Proposals were due on November 2, 2020. Table 1 summarizes the solicitation process:

Table 1: Summary of Solicitation Process
Proposal Description Utilities Graphic Design Services
(RFP 180652)
Length of Service 3 years
Number of notices sent to vendors 283
Number of proposals downloaded by vendors 18
Bids received 12

Based on the evaluation, staff selected EGAD because of their municipal experience, skillset, and lowest cost proposal. The award of the contract does not guarantee EGAD will be assigned any dollar amount, quantity, or type of graphic design service projects.

FISCAL/RESOURCE IMPACT
Funding of $85,000 is available in the fiscal year 2024 Utilities Department Operating Budget.

Funding for subsequent years of the amendment is subject to Council’s approval of each fiscal year’s budget appropriation.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because approval of this contract amendment is an organizational or administrative activity of government that will not result in direct or indirect changes in the environment, under CEQA Guidelines section 15378(b)(5).

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ATTACHMENTS
Attachment A: Contract with Eric Gouldsberry Art Design (EGAD) Contract #S21180652 Attachment B: Contract with Eric Gouldsberry Art Design (EGAD) Contract #S21180652, Amendment No.1
APPROVED BY:

Dean Batchelor, Director of Utilities
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Professional Services
Rev. April 23, 2020
1 CITY OF PALO ALTO CONTRACT NO. S21180652

AGREEMENT BETWEEN THE CITY OF PALO ALTO AND

ERIC GOULDSBERRY ART DIRECTION FOR PROFESSIONAL SERVICES

This Agreement is entered into on this 21st day of January, 2021, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and ERIC GOULDSBERRY ART DIRECTION, a sole proprietor, located at 4101 Ashbrook Circle, San Jose, CA 95124 ("CONSULTANT").

RECITALS

The following recitals are a substantive portion of this Agreement.

A. CITY desires to engage a consultant to provide on- call graphic design services (“Services”).

B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services.

C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement.

NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree:

AGREEMENT

SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY.

Optional On-Call Provision (This provision only applies if checked and only applies to on-call agreements.)
Services will be authorized by CITY , as needed, with a Task Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A-1.

Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4.

DocuSign Envelope ID: 9E8B08A6-3BCD-4C74-9909-2024BA1F3F14 Item 4
Attachment A - Contract
with Eric Goldsberry Art
Design (EGAD) Contract
#S21180652

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Professional Services
Rev. April 23, 2020
2 SECTION 2. TERM.

The term of this Agreement shall be from the date of its full execution through January 22, 2024 unless terminated earlier pursuant to Section 19 of this Agreement.

SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement . Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT.

CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT.

SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Eighty Thousand Dollars ($80,000.00) per contract year, for an overall not to exceed amount of Two Hundred Forty Thousand Dollars ($240,000.00) over the three- year term of the Agreement . CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY.

Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”.

SECTION 5. INVOICES . In order to request payment, CO NSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CON SULTANT’s billing rates (set forth in Exhibit “ C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY.

CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt.

SECTION 6. QUALIFICATIONS/STANDARD OF CARE . All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to DocuSign Envelope ID: 9E8B08A6-3BCD-4C74-9909-2024BA1F3F14 Item 4
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3 perform the Services.

All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same disci pline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances.

SECTION 7. COMPLIANCE WITH LAWS . CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services.

SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services , arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions.

SECTION 9. COST ESTIMATES . If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any sub mittal exceeds the CITY’s stated construction budget by ten percent (10%) or more , CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY.

SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY.

SECTION 11. ASSIGNMENT . The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void.

SECTION 12. SUBCONTRACTING.

CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee.

CONSULTANT shall be responsible for directing the work of any subconsultants and for a ny compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a DocuSign Envelope ID: 9E8B08A6-3BCD-4C74-9909-2024BA1F3F14 Item 4
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SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Eric Gouldsberry as the project manager to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day -to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property.

CITY’s project manager is Catherine Elvert, Utilities Department, 250 Hamilton Avenue, Palo Alto, CA 94301, Telephone: (650) 329-2417. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time.

SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work.

SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT ’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement.

SECTION 16. INDEMNITY.

16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in an y manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party.

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5 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party.

16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement.

SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or la w, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law.

SECTION 18. INSURANCE.

18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies.

18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A -:VII or higher which are licens ed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above.

18.3. Certificates evidencing such insurance shall be filed with CITY concurrent- ly with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thi rty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement.

18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired.

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6 SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.

19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services.

19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY.

19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY.

19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or bef ore the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or terminati on of this Agreement:
14, 15, 16, 19.4, 20, and 25.

19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement.

SECTION 20. NOTICES.

All notices h ereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows:

To CITY: Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303

With a copy to the Purchasing Manager

To CONSULTANT: Attention of the project director
at the address of CONSULTANT recited above

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7 SECTION 21. CONFLICT OF INTEREST.

21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services.

21.2. CONSULTANT further covenants that, in the performance of this Agreement, it w ill not employ subconsultants, contractors or persons having such an interest.

CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in ac cordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California.

21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Po litical Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act.

SECTION 2 2. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section

2.30.510, CON SULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section

2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment.

SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with t he CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, C ONSULTANT shall comply with the following zero waste requirements:
(a) All printed materials provided by C CONSULTANT to C ITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post -consumer content paper, unless otherwise approved by CITY ’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post - consumer material and printed with vegetable based inks. (b) Goods purchased by C ONSULTANT on behalf of CITY shall be purchased in accordance with CITY ’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office.

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8 (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY , for reuse or recycling. C ONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed.

SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE .

CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who perfo rms at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section

4.62.030 for each hour worked within the geo graphic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060.

SECTION 25. NON-APPROPRIATION

25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement.

SECTION 2 6. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC

WORKS CONTRACTS

26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay pre vailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000.

SECTION 27. MISCELLANEOUS PROVISIONS.

27.1. This Agreement will be governed by the laws of the State of California.

27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California.

27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third DocuSign Envelope ID: 9E8B08A6-3BCD-4C74-9909-2024BA1F3F14 Item 4
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9 parties.

27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral.

This document may be amended only by a written instrument, which is signed by the parties.

27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties.

27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect.

27.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement.

27.8 In the event of a conflict between the terms of this Agreement and the exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall control.

27.9 If, pursuant to this contract with CONSULTANT, C ITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent.

27.10 All unchecked boxes do not apply to this Agreement.

27.11 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities.

27.12 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement.

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10 CONTRACT No. S21180652 SIGNATURE PAGE

IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written.

CITY OF PALO ALTO

____________________________
Purchasing Manager (Required on contracts
over $50,000)

APPROVED AS TO FORM:

__________________________
City Attorney or designee

ERIC GOULDSBERRY ART

DIRECTION

By:

Name:

Title:

Attachments:

EXHIBIT “A”: SCOPE OF SERVICES
EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER (for on-call contracts only) EXHIBIT “B”: SCHEDULE OF PERFORMANCE
EXHIBIT “C”: COMPENSATION
EXHIBIT “C-1”: SCHEDULE OF RATES
EXHIBIT “D”: INSURANCE REQUIREMENTS
EXHIBIT “E”: OBLIGATIONS REGARDING NON-DISCLOSURE OF

CONFIDENTIAL INFORMATION

DocuSign Envelope ID: 9E8B08A6-3BCD-4C74-9909-2024BA1F3F14 Eric Gouldsberry
Art Director-Owner
Aylin Bilir
Christine Paras
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11 EXHIBIT “A”

SCOPE OF SERVICES

CONSULTANT shall provide services as requested by the CITY in a Task Order, which may include but not be limited to the following services: Concept, Design and Art Direction; Production; Client and Vendor Meetings; Creative Writing; Video Concepting, Writing and Production/Editing; Photo/Video Direction; Print Direction; Translation Services.

In the performance of this Agreement, CONSULTANT may have access to CITY’s Confidential Information, as defined by the Non-Disclosure Agreement attached as Exhibit E to this Agreement.

CONSULTANT will hold any and all CITY Confidential Information in strict confidence and use it only for the performance of its obligations to CITY under this Agreement and for no other purpose, in accordance with the terms of Exhibit E.

Task 1: Graphic Design
CONSULTANT shall develop distinctive creative concepts tailored to CITY target audience, while remaining consistent with CITY branding. Examples of CITY audiences include:
residents, businesses and industry, schools and community groups, internal staff, elected officials and/or other government agencies with which the City collaborates.

CONSULTANT shall collaborate with CITY project manager at the start of each calendar or fiscal year, whichever is most appropriate for scheduling and developing strategic communication campaigns, to develop annual outreach materials, incorporating traditional and new media.

Specifically, as directed by CITY, CONSULTANT shall create or assist with creating traditional outreach materials and provide graphic design services that may include:
a) Utility bill inserts, print ads, factsheets, newspaper articles, displays, brochures b) High-resolution photographs with a regional context (including original photography if needed)
c) Images, charts, infographics and graphs clearly explaining complicated information or a compelling call to action
d) Creative elements for the website including photographs, graphics, charts, videos, games and other elements.
e) Web content management including potential HTML editing and or webpage creation and design.
f) Videos and animated images for a variety of uses including but not limited to online and classroom educational videos, television commercials, and other dynamic media advertisements
g) Movie making, including story and script development, animation and graphics h) Promotional items for residents, schools, special events, and businesses i) Customized illustrations and artwork for a variety of formats DocuSign Envelope ID: 9E8B08A6-3BCD-4C74-9909-2024BA1F3F14 Item 4
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12 j) Coordinate with outside printers and in-house City of Palo Alto copying services

• Deliverables: in addition to the specific deliverables requested in a duly authorized Task Order, Contractor shall transfer high resolution design file archives to CITY on a monthly basis.

Any artwork designed for this contract shall become the property of the City of Palo Alto, as set forth in Section 14 of the Agreement.

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13 EXHIBIT “A-1”

PROFESSIONAL SERVICES TASK ORDER
Consultant hereby agrees to perform the work detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below . All exhibits referenced in Item 8 are incorporated into the Agreement by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below.

CONTRACT NO. ISSUE DATE
Purchase Requisition No.

1A. MASTER AGREEMENT NUMBER
1B. TASK ORDER NO.

2. CONSULTANT

3. PERIOD OF PERFORMANCE: START: COMPLETION:
4 TOTAL TASK ORDER PRICE: $__________________
BALANCE REMAINING IN MASTER AGREEMENT $__________________________________

5. BUDGET CODE: _______________
COST CENTER_________________ COST ELEMENT______________ WBS/CIP___ _____PHASE___

6. CITY PROJECTMANAGER’S
NAME/DEPARTMENT_________________________________________

7. DESCRIPTION OF SCOPE OF SERVICES
MUST INCLUDE:
 WORK TO BE PERFORMED
 SCHEDULE OF WORK
 BASIS FOR PAYMENT & FEE SCHEDULE
 DELIVERABLES
 REIMBURSABLES (with “not to exceed” cost)

8. ATTACHMENTS: A: Scope of Services B: __________________________________ -----------------------------------------------------------------------------------------------------------------------------------

I hereby authorize the performance of I hereby acknowledge receipt and acceptance the work described above in this Task Order. of this Task Order and warrant that I have authority to sign on behalf of Consultant.

APPROVED: APPROVED:

CITY OF PALO ALTO COMPANY NAME: ______________________

BY:__________________________________ BY:____________________________________ Name ________________________________ Name __________________________________ Title_________________________________ Title___________________________________ Date _________________________________ Date ___________________________________

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14 EXHIBIT “B”

SCHEDULE OF PERFORMANCE

CONSULTANT shall perform the Services so as to complete each Project on a timeline as agreed between the Parties and as indicated by the completion date shown on a duly authorized Task Order. The time to complete each Project may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed.

For each Project, CITY shall submit to CONSULTANT a Task Order scope of work outlining the goal and scope of the Project. CONSULTANT shall provide CITY with a written estimate for timing and cost to complete each Project. CONSULTANT shall not begin work on any Project until CITY approves the estimate and issues a Task Order in substantially the same form as Exhibit A-1 to this Agreement, which CONSULTANT accepts and authorizes.

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15 EXHIBIT “C”

COMPENSATION

The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement based on the hourly rate schedule attached as Exhibit C-1, but not to exceed the total Task Order price shown on any Project Task Order without a duly authorized amendment.

The compensation to be paid to CONSULTANT under this Agreement for all services , additional services, and reimbursable expenses shall not exceed the amount(s) stated in Section 4 of this Agreement . CONSULTANT agrees to complete all Services and Additional Services, including reimbursable expenses, within this /these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY.

The administrative, overhead, secretarial tim e or secretarial overtime, word processing, photocopying, in- house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses.

ADDITIONAL SERVICES

The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s P roject Manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense s, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement.

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16 EXHIBIT “C-1”

SCHEDULE OF RATES

Hourly Rates:

Design/Concept/Art Direction $100/hour
Production (including revisions) $100/hour
Photo/Print Direction $100/hour
Client/Vendor Meetings $100/hour
General/Administrative $80/hour

Fixed Project Rates based on basic descriptions:

Potential Project Fixed Rate
48-hour rush (Same rates) $100/hour
Single-sided advertisement (e.g., bill insert, flyer, poster, magazine ad, etc.)
$750
Double-sided advertisement $1,000
Trifold brochure $1,000
Programs or rebate brochure/catalogue (based on 16-page sample)
$1,500
Social Media ads $500
Print and electronic ad design bundle $1,250
Translation services (assumes 350 words per page) $98/page

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17 EXHIBIT “D”

INSURANCE REQUIREMENTS

CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT

OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.

AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW:

REQUIRED TYPE OF COVERAGE REQUIREMENT

MINIMUM LIMITS
EACH

OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY

STATUTORY

STATUTORY

YES

GENERAL LIABILITY, INCLUDING

PERSONAL INJURY, BROAD FORM

PROPERTY DAMAGE BLANKET

CONTRACTUAL, AND FIRE LEGAL

LIABILITY

BODILY INJURY

PROPERTY DAMAGE

BODILY INJURY & PROPERTY DAMAGE
COMBINED.
$1,000,000

$1,000,000

$1,000,000
$1,000,000

$1,000,000

$1,000,000

YES AUTOMOBILE LIABILITY, INCLUDING

ALL OWNED, HIRED, NON-OWNED

BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE

PROPERTY DAMAGE

BODILY INJURY AND PROPERTY

DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000

$1,000,000

$1,000,000
$1,000,000
$1,000,000
$1,000,000

$1,000,000

$1,000,000
YES

PROFESSIONAL LIABILITY,

INCLUDING, ERRORS AND OMISSIONS,

MALPRACTICE (WHEN APPLICABLE),

AND NEGLIGENT PERFORMANCE

ALL DAMAGES $1,000,000

YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE,

SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT

AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND

PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.

I. INSURANCE COVERAGE MUST INCLUDE:

A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY.

II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569.

III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS”

A. PRIMARY COVERAGE

WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS

AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS.

B. CROSS LIABILITY

THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL

NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS

ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF DocuSign Envelope ID: 9E8B08A6-3BCD-4C74-9909-2024BA1F3F14 Item 4
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18 THE COMPANY UNDER THIS POLICY.

C. NOTICE OF CANCELLATION

1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON

OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE

AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL:

HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR
HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP

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19 EXHIBIT “E”

OBLIGATIONS REGARDING NON-DISCLOSURE OF CONFIDENTIAL

INFORMATION

1. PURPOSE

1.1 In its performance of Services under this Agreement, CONSULTANT and its directors, officers, partners, managers, members, employees, advisors, agents, sub-contractors and other representatives of CONSULTANT and their subsidiaries and affiliates, including, without limitation, attorneys, accountants, consultants, and financial advisors (collectively, the “Representatives”) may acquire and otherwise gain access to Confidential Information, as defined in Section 1 of this Exhibit “E”, which is exempt from public disclosure under the California Public Records Act, Cal. Gov. Code section 6250 et seq.

1.2 In accordance with the terms and conditions of this Agreement, CONSULTANT agrees to take reasonable precautions to ensure that Confidential Information of CITY, as defined in this Exhibit, is safeguarded against disclosure to unauthorized employees or third parties.

1.3 CITY would not share or disclose any Confidential Information to CONSULTANT but for the legal protections against unauthorized disclosures intended to be afforded by California law and this Agreement, and is relying on this Agreement in disclosing such Confidential Information to CONSULTANT.

2. CONFIDENTIAL INFORMATION, DEFINED

2.1 “Confidential Information”, defined: “Confidential Information” means any and all information which is of a non-public, proprietary or confidential nature, in any form or medium, written or oral, (whether prepared by the CITY, its employees, or agents, and irrespective of the form or means of communication and whether it is labeled or otherwise identified as confidential) that is furnished to the Receiving Party by the CITY, and any other proprietary business and utility data or information consisting of research and development, intellectual property, technical information, computer programs, software, maps, methodologies, innovations, software tools, know-how, knowledge, designs, drawings, specifications, concepts, data, reports, processes, techniques, documentation, pricing, marketing plans and customer lists. Confidential Information shall also include notes, copies, printouts, analysis, discussion or summaries of or regarding Confidential Information prepared by the CONSULTANT or its directors, officers, partners, managers, members, employees, advisors, agents, sub- contractors and other representatives of the CONSULTANT and their subsidiaries and affiliates, including without limitation attorneys, accountants, consultants, and financial advisors (collectively, “Representatives”).

2.2 Exceptions. “Confidential Information” shall exclude (and the CONSULTANT shall not be under any obligation to maintain in confidence) any information (or DocuSign Envelope ID: 9E8B08A6-3BCD-4C74-9909-2024BA1F3F14 Item 4
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20 any portion thereof) disclosed to CONSULTANT by CITY to the extent that such information:

(a) is in the public domain at the time of disclosure; or

(b) at the time of or following disclosure, becomes generally known or available through no act or omission on the part of CITY; or

(c) is known, or becomes known, to CONSULTANT from a source other than CITY or its Representatives (as defined herein), provided that disclosure by such source is not in breach of a confidentiality agreement CITY; or

(d) is independently developed by CONSULTANT without violating any of its obligations under this Agreement or any other agreement between the Parties; or

(e) is legally required to be disclosed by judicial or other governmental action; provided, however, that prompt notice of such judicial or other governmental action shall have been first given to CITY, which shall be afforded the opportunity to exhaust all reasonable legal remedies to maintain the Confidential Information in confidence; or

(f) is permitted to be disclosed by a formal written agreement executed by and between the Parties.

Specific information shall not fall within the exceptions of Sections (a) through (f) above merely because it is embraced by more general information falling within such exceptions.

3. CALIFORNIA PUBLIC RECORDS ACT

3.1 CONSULTANT acknowledges that CITY is a public agency subject to the requirements of the California Constitution, Article 1, Section 3 and California Public Records Act Cal. Gov. Code section 6250 et seq. CONSULTANT acknowledges that CITY may submit to or otherwise provide access to CONSULTANT Confidential Information that CITY or any utility customer of CITY considers to be protected from disclosure pursuant to exemptions granted by applicable California law.

3.2 Whether or not there is a request or demand of any third party not a Party to this Agreement (the “Requestor”) for the production, inspection and/or copying of information designated by CITY as Confidential Information, CONSULTANT shall be solely responsible for taking whatever legal steps CITY deems necessary to protect information deemed by it to be Confidential Information and to prevent release of information to the Requestor (including the release of such information by CONSULTANT).

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21 3.3 Under no circumstances will CONSULTANT be permitted to comply with the Requestor’s demand for disclosure of such Confidential Information that CITY deems confidential and not intended for disclosure to the general public, or otherwise publicly disclose the Confidential Information to any person not authorized by law to receive such information.

4. CONFIDENTIAL INFORMATION DESIGNATION

4.1 As practicable, the Confidential Information shall be marked with the words “Confidential” or “Confidential Material” or with words of similar import. CITY shall instruct CONSULTANT that information of a financial, personal, or proprietary nature being conveyed orally and intended by CITY to be covered by the terms of this Agreement, is deemed Confidential Information. To the extent possible, CITY shall endeavor to mark any electronic document intended to be covered by the terms of this Agreement with the words “Confidential” or similar words, or, if that is not possible or would be exceedingly difficult, CITY shall notify CONSULTANT (for example, by covering e-mail transmitting the electronic document) that the electronic document is Confidential Information.

4.2 CITY’s failure, for whatever reason, to mark any material at the time it is produced to CONSULTANT, or to notify it that oral or electronic material is Confidential Information at the time it is provided, shall not take the material out of the coverage of this Agreement for all time, and CONSULTANT shall treat the material as Confidential Information once CITY has notified it that the material is to be covered by this Agreement.

5. DUTY TO KEEP CONFIDENTIAL

5.1 CONSULTANT agrees to maintain as confidential, to the extent permitted or required by applicable law, all Confidential Information furnished or otherwise made available to the CONSULTANT, or its Representatives by CITY.

CONSULTANT acknowledges that the Confidential Information is proprietary and a valuable asset of CITY and agrees that CONSULTANT shall take reasonable precautions to ensure that such Confidential Information is safeguarded against disclosure to unauthorized employees, Representatives or third parties.

(a) CONSULTANT shall use the Confidential Information solely as permitted by the Contract and shall not sell Confidential Information or otherwise disclose such Confidential Information under any circumstances and without the prior written consent of CITY. CONSULTANT shall not disclose the Confidential Information, or portions thereof, to any of its Representatives, except to those who need to know such information for the purpose of advising CITY and who agree to the terms of this Agreement.

DocuSign Envelope ID: 9E8B08A6-3BCD-4C74-9909-2024BA1F3F14 Item 4
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22 (b) CONSULTANT agrees that any of the Representatives to whom the Confidential Information is disclosed will be informed of the confidential or proprietary nature of such information and of CONSULTANT’s obligations under this Agreement. CONSULTANT is responsible for any use of Confidential Information by any of its Representatives.

(c) CONSULTANT shall ensure that:

(i) any Representatives with whom CONSULTANT shares such Confidential Information or who acquire knowledge of such Confidential Information from or through CONSULTANT regard and treat such Confidential Information of CITY as strictly confidential and wholly owned by CITY, and

(ii) CONSULTANT shall not (and CONSULTANT shall ensure that any Representatives with whom CONSULTANT shares such
Confidential Information or who acquire knowledge of such Confidential Information from or through CONSULTANT do not) for any reason, in any fashion, either directly or indirectly, sell, lend, lease, distribute, license, give, transfer, assign, show, disclose, disseminate, or otherwise communicate any such Confidential Information to any third party, or misappropriate, reproduce, copy or use any such Confidential Information, in either case, for any purpose other than in accordance with this Agreement.

(d) If CONSULTANT or any of its Representatives are requested or required to disclose any Confidential Information by law, regulation, the applicable rules of any national securities exchange or other market or reporting system, oral questions, interrogatories, requests for information or other documents in legal proceedings, subpoena, civil investigative demand or any other similar process, CONSULTANT shall provide CITY with prompt written notice of any such request or requirement so that CITY has an opportunity to seek a protective order via writ of mandate or other appropriate remedy, or waive compliance with the provisions of this Agreement.

(e) If CITY waives compliance with the provisions of this Agreement with respect to a specific request or requirement, CONSULTANT and its Representatives shall disclose only that portion of the Confidential Information that is expressly covered by such waiver and which is necessary to disclose in order to comply with such request or requirement.

CONSULTANT and its Representatives shall cooperate in a reasonable manner with CITY in attempting to preserve the confidentiality of the Confidential Information.

DocuSign Envelope ID: 9E8B08A6-3BCD-4C74-9909-2024BA1F3F14 Item 4
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23 (f) If (in the absence of a waiver by CITY) CONSULTANT has not secured a protective order or other appropriate remedy despite attempting to do so, and CONSULTANT or one of its Representatives is nonetheless then legally compelled to disclose any Confidential Information, CONSULTANT or such Representative may, without liability hereunder, disclose only that portion of the Confidential Information that is necessary to be disclosed. In the event that disclosure is made in accordance with this subsection, CONSULTANT shall exercise, and cause its Representatives to exercise, reasonable efforts to preserve the confidentiality of the Confidential Information, including obtaining reliable assurance at the sole expense of CONSULTANT that confidential treatment shall be accorded any Confidential Information so furnished.

6. NO LIABILITY, RELEASE, OR OBLIGATION

Except as set forth in any formal written agreement executed by and between the parties, neither CONSULTANT nor any of its Representatives shall be entitled to rely on any statement, promise, agreement or understanding, whether written or oral, or any custom, usage of trade, course of dealing or conduct. In addition, each Party understands and acknowledges that neither CITY nor any of its representatives, employees or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of any Confidential Information, and that neither CITY nor any of its representatives, employees or agents shall have any liability whatsoever to CONSULTANT or to any of its Representatives relating to or resulting from the Confidential Information or any errors therein or omissions therefrom.

7. REMEDIES

In recognition that an irreparable injury may result to CITY, if any provision of this Exhibit E is violated, CONSULTANT agrees that upon any breach or threatened breach of any provision of this Exhibit E by CONSULTANT or any of its Representatives, that CITY shall be entitled to seek an injunction or specific performance prohibiting such conduct or any other relief as may be permitted by law.

8. RETURN OF CONFIDENTIAL INFORMATION

8.1 CONSULTANT shall have access to the Confidential Information provided by CITY only during the term of this Agreement, and shall return all Confidential Information provided under this Agreement upon its termination, or at any time upon request of CITY, as described in Section 8.2 of this Exhibit E.

8.2 CITY may at any time request that CONSULTANT promptly return to CITY or destroy any or all documents or other materials containing Confidential Information of CITY, and CONSULTANT shall immediately comply with any such request. Notwithstanding the return or destruction of the Confidential Information as contemplated by this section 8 of this Exhibit E, the CONSULTANT and its Representatives will continue to be bound by the terms of this Agreement with respect thereto, including all obligations of confidentiality.

DocuSign Envelope ID: 9E8B08A6-3BCD-4C74-9909-2024BA1F3F14 Item 4
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24 9. SURVIVAL

CONSULTANT’s obligations of confidentiality and non-circumvention under this Exhibit E shall survive the termination of this Agreement.

10. WAIVER; AMENDMENT

None of the terms or conditions of this Exhibit E may be amended or waived except in writing signed by the parties. The parties agree that no waiver, amendment, or modification of this Exhibit E shall be established by conduct, custom, or course of dealing. The failure by any party at any time or times to require performance of any provision hereof will in no manner affect its right at a later time to enforce the same.

11. OWNERSHIP RIGHTS NOT CREATED

The transfer of Confidential Information hereunder shall not be construed as granting a license of any kind or any right of ownership in the Confidential Information to CONSULTANT.

12. NO OBLIGATION TO DISCLOSE

Nothing in this Section shall obligate CITY to disclose specific Confidential Information to CONSULTANT. Such disclosures shall be at the CITY’s sole discretion.

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Certificate Of Completion
Envelope Id: 9E8B08A63BCD4C7499092024BA1F3F14
Status: Completed
Subject: Please DocuSign: S21180652 Eric Gouldsberry Art Direction - Legal Reviewed.pdf Source Envelope:

Document Pages: 24
Signatures: 3
Envelope Originator:

Certificate Pages: 2
Initials: 0
Terry Loo
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US &
Canada)
Comments: yes
250 Hamilton Ave
Palo Alto , CA 94301
[email protected]
IP Address: 199.33.32.254
Record Tracking
Status: Original
1/21/2021 3:18:42 PM
Holder: Terry Loo
[email protected]
Location: DocuSign
Security Appliance Status: Connected
Pool: StateLocal
Storage Appliance Status: Connected
Pool: City of Palo Alto
Location: DocuSign
Signer Events
Signature
Timestamp
Eric Gouldsberry
[email protected]
Art Director-Owner
Security Level: Email, Account Authentication
(None)

Signature Adoption: Pre-selected Style
Using IP Address: 73.189.253.56
Sent: 1/21/2021 3:21:28 PM
Viewed: 1/21/2021 3:27:47 PM
Signed: 1/21/2021 3:29:21 PM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Aylin Bilir
[email protected]
Deputy City Attorney
Security Level: Email, Account Authentication
(None)

Signature Adoption: Pre-selected Style
Using IP Address: 67.180.217.241
Sent: 1/21/2021 3:29:25 PM
Viewed: 1/21/2021 8:35:07 PM
Signed: 1/21/2021 8:40:03 PM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Christine Paras
[email protected]
Asst. Director Administrative Services
City of Palo Alto
Security Level: Email, Account Authentication
(None)
Signature Adoption: Uploaded Signature Image
Using IP Address: 199.33.32.254
Sent: 1/21/2021 8:40:06 PM
Viewed: 1/25/2021 9:01:05 AM
Signed: 1/25/2021 9:59:02 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
In Person Signer Events
Signature
Timestamp
Editor Delivery Events
Status
Timestamp
Agent Delivery Events
Status
Timestamp
Intermediary Delivery Events
Status
Timestamp
Certified Delivery Events
Status
Timestamp
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Carbon Copy Events
Status
Timestamp
Nelly Baumb
[email protected]
Deputy City Clerk
City of Palo Alto
Security Level: Email, Account Authentication
(None)
Sent: 1/25/2021 9:59:06 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Tabatha Boatwright
[email protected]
Administrative Associate III
City of Palo Alto
Security Level: Email, Account Authentication
(None)
Sent: 1/25/2021 9:59:07 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Catherine Elvert
[email protected]
Utilities Communications Manager
Security Level: Email, Account Authentication
(None)
Sent: 1/25/2021 9:59:09 AM
Viewed: 1/25/2021 12:50:31 PM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Witness Events
Signature
Timestamp
Notary Events
Signature
Timestamp
Envelope Summary Events
Status
Timestamps
Envelope Sent
Hashed/Encrypted
1/21/2021 3:21:28 PM
Certified Delivered
Security Checked
1/25/2021 9:01:05 AM
Signing Complete
Security Checked
1/25/2021 9:59:02 AM
Completed
Security Checked
1/25/2021 9:59:09 AM
Payment Events
Status
Timestamps
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Vers.: Aug. 5, 2019

AMENDMENT NO. 1 TO CONTRACT NO. S21180652

BETWEEN THE CITY OF PALO ALTO AND

ERIC GOULDSBERRY ART DIRECTION

This Amendment No. 1 (this “Amendment”) to Contract No. S21180652 (the “Contract” as defined below) is entered into as of January 22, 2024, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and ERIC GOULDSBERRY ART DIRECTION, a sole proprietor, located at 4101 Ashbrook Circle, San Jos e, CA 95124 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment.

R E C I T A L S

A. T he Contract (as defined below) was entered into by and between the Parties hereto for the provision of on-call graphic design services, as detailed therein.

B. T he Parties now wish to amend the Contract in order to increase compensation by One Hundred Seventy Thousand Dollars ($170,000) from Two Hundred Forty Thousand Dollars ($240,000) to a new total not to exceed amount of Four Hundred Ten Thousand Dollars ($410,000) and extend the contract term by two (2) years, through January 21, 2026.

NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree:

SECTION 1. Definitions. The following definitions shall apply to this Amendment:

a. Contract. The term “Contract” shall mean Contract No. S21180652 between CONSULTANT and CITY, dated January 21, 2021.

b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract.

SECTION 2. Section 2, “TERM” of the Contract is hereby amended to read as follows:

“The term of this Agreement shall be from the date of its full execution through January 21, 2026 unless terminated earlier pursuant to Section 19 (Termination) of this Agreement.”

SECTION 3. Section 4, “NOT TO EXCEED COMPENSATION ” of the Contract is hereby amended to read as follows:

“The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Eighty Thousand DocuSign Envelope ID: 4616F4FB-0B5A-4FD0-83D1-E05152523FF2 Item 4
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Design (EGAD) Contract
#S21180652, Amendment
No. 1

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Vers.: Aug. 5, 2019

Dollars ($80,000) per year for the first three years of the contract, and s hall not exceed Eighty-Five Thousand Dollars ($ 85,000) per contract yea r for years four and five , for an overall not to exceed amount of Four Hundred Ten Thousand Dollars ($410,000) over the five-year term of the Agreement. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY.

Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”.”

SECTION 4. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect.

SECTION 5. Incorporation of Recitals . The recita ls set forth above are terms of this Amendment and are fully incorporated herein by this reference.

(SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.)

DocuSign Envelope ID: 4616F4FB-0B5A-4FD0-83D1-E05152523FF2 Item 4
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with Eric Goldsberry Art
Design (EGAD) Contract
#S21180652, Amendment
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SIGNATURES OF THE PARTIES

IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written.

CITY OF PALO ALTO

_____________________________
City Manager

APPROVED AS TO FORM:

_____________________________
City Attorney or designee

ERIC GOULDSBERRY ART DIRECTION

By:______________________________

Name:___________________________

Title:____________________________

DocuSign Envelope ID: 4616F4FB-0B5A-4FD0-83D1-E05152523FF2 Art Director/Owner
Eric Gouldsberry
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Certificate Of Completion
Envelope Id: 4616F4FB0B5A4FD083D1E05152523FF2
Status: Completed
Subject: Complete with DocuSign: S21180652 amendment1 final.pdf Source Envelope:

Document Pages: 3
Signatures: 1
Envelope Originator:

Certificate Pages: 2
Initials: 0
Annmarie Romero
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
250 Hamilton Ave
Palo Alto , CA 94301
[email protected]
IP Address: 199.33.32.254
Record Tracking
Status: Original
12/27/2023 8:27:27 AM
Holder: Annmarie Romero
[email protected]
Location: DocuSign
Security Appliance Status: Connected
Pool: StateLocal
Storage Appliance Status: Connected
Pool: City of Palo Alto
Location: DocuSign
Signer Events
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Eric Gouldsberry
[email protected]
Art Director/Owner
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(None)

Signature Adoption: Pre-selected Style
Using IP Address: 73.189.253.56
Sent: 12/27/2023 8:30:56 AM
Viewed: 12/27/2023 10:51:53 AM
Signed: 12/27/2023 10:53:02 AM
Electronic Record and Signature Disclosure:

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Catherine Elvert
[email protected]
Utilities Communications Manager
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(None)
Sent: 12/27/2023 10:53:03 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Tabatha Boatwright
[email protected]
Utilities Management Analyst
City of Palo Alto
Security Level: Email, Account Authentication
(None)
Sent: 12/27/2023 10:53:03 AM
Viewed: 12/27/2023 11:05:05 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Witness Events
Signature
Timestamp
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No. 1

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Notary Events
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12/27/2023 8:30:56 AM
Certified Delivered
Security Checked
12/27/2023 10:51:53 AM
Signing Complete
Security Checked
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Completed
Security Checked
12/27/2023 10:53:03 AM
Payment Events
Status
Timestamps
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Design (EGAD) Contract
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: February 5, 2024
Staff Report: 2311-2281
TITLE
Approval of Amendment No. 2 to Contract S23184693 with Infosend, Inc. for Printing Services for the Utilities Department Programs and Projects to add $300,000 for a New Total Not to Exceed Amount of $555,000, and to Amend the Schedule of Rates. CEQA status: not a project.

RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to execute Amendment Number 2 to contract S23184693 with Infosend, Inc. for printing services for the Utilities Department Programs and Projects to add $300,000 for a total not to exceed amount of $555,000 through January 31, 2026, and to amend the schedule of rates to include more types of printing services without increasing existing per-unit costs.

BACKGROUND
On February 1, 2023, the City awarded a contract to Infosend, Inc. to provide print services for the Utilities Department communication and outreach requirements. Printed materials are needed for communication on regulatory actions, rates, safety, infrastructure projects, customer programs, and customer service. Print services include, but are not limited to, monthly utility bill inserts, full page brochures, triple and bifold brochures, door hangers, envelopes, letterhead, flyers, posterboards, and more.

Contracting with an outside print vendor is necessary because currently, the City’s Print Shop and mail room do not have the resources to perform this work in-house. Many of the Department’s print needs are high volume specialty items that require unique formatting, layout, folding, and mailing. The City’s Print Shop is unable to meet these needs at this time, however Utilities will work with the Print Shop in the coming year to determine whether more print materials can be shifted to in-house printing.

Based on staff’s original estimates, Infosend, Inc. was awarded a contract of $255,000 for a total amount not to exceed $85,000 per year, for a three-year term. The original estimated contract Item 5
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dollar amount with Infosend, Inc. is not sufficient to cover the costs for these print services and therefore the annual not to exceed amount is recommended to be increased.

DISCUSSION
The City of Palo Alto Utilities (CPAU) Department provides electric, natural gas, water, and wastewater services to approximately 29,500 customers. Fiber optic service is currently available to commercial customers. Use of printed communication and outreach materials for the community are critical to the Utilities Department achieving its mission of providing safe, reliable, cost-effective, and sustainable services.

Printed materials are necessary for CPAU to meet Federal and State regulatory requirements for public outreach about critical items such as gas safety awareness, drinking water quality, utilities rates, crisis, and emergency situations. Implementation and outreach about residential and non- residential customer programs are key to enable CPAU to meet mandates and goals for energy and water efficiency savings. Print services ensure CPAU informs customers about utility billing, meter reading, low-income customer programs, and account management services through the online MyCPAU portal.

Per City rules and regulations, CPAU provides printed notifications to the public for capital improvement, operations, and maintenance projects. Local policies adopted by City Council such as the Sustainability and Climate Action Plan (S/CAP) require extensive customer outreach and marketing for participation in programs and initiatives to meet established goals. CPAU continues to introduce new technologies to improve customer service through adoption of a new Outage Management System (OMS), Advanced Metering Infrastructure (AMI), and fiber optic services.

These endeavors require expansive outreach through print and digital means.

During the first year of the contract with Infosend, Inc. it became evident that the original dollar amount allocated was insufficient to cover the costs for these print services. Staff recommend increasing the annual not to exceed amount. Staff also recommends amending the schedule of rates to include additional types of printing services without raising the unit pricing for the printing services already addressed in the agreement.

While Infosend’s unit pricing has remained the same, more services from Infosend have been needed than originally anticipated. New programs and initiatives this year created the need for additional print services beyond the original estimate and additional programs are in development to align with the City’s Sustainability and Climate Action Plan (S/CAP), beneficial electrification for homes, buildings, and the transportation sector, and energy and water efficiency mandates. Over the years, additional outreach is required to meet compliance for regulations such as gas safety awareness, drinking water quality, and utilities rates.

Print estimates for different types of materials that have informed this recommended contract not to exceed funding are below. These quantities and type of print materials will vary throughout the year based on programmatic and outreach needs as well as in house capacity.

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1) Monthly utility bill inserts: 600,000 quantity
2) Direct mail postcards: 160,000 quantity
3) Brochures: 100,000 quantity
4) Rate changes notifications: 75,000 quantity
5) Miscellaneous projects: 30,000 quantity
Bid Process
The City issued a Request for Proposal through PlanetBids on August 16, 2022 to identify providers with experience working with municipal utilities to provide printing services.

Proposals were due on September 9, 2022. Table 1 summarizes the solicitation process:

Based on the evaluation, staff selected Infosend because of their municipal experience and lowest cost proposal. The award of the contract does not guarantee Infosend will be assigned any dollar amount, quantity, or type of printing materials.

As a result of Council’s approval to maintain in-house print and mail services ( Agenda Item 5; Staff Report 2310-2165) 1, Utilities will work with the Print Shop to provision services in-house.

The Print Shop is in the process of adding resources following Council’s approval in late 2023, which will increase capacity.

FISCAL/RESOURCE IMPACT
Funding for FY 2024 is available in the FY 2024 Utilities Operating Budget. Funding for subsequent years is subject to City Council approval of the annual appropriation of funds through the annual 1 Agenda Item 5, Staff Report 2310-2165
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13056 Proposal Description
Utilities Printing
Services (RFP 184693)
Length of Service 3 years
Number of notices sent to vendors 232
Number of proposals downloaded by vendors 22
Bids received 7
Table 1: Summary of Solicitation Process
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budget process. Table 2 summarizes the breakdown of the amendment amount for the term of the contract.

ENVIRONMENTAL REVIEW
This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA Guidelines, section 15378.

ATTACHMENTS
Attachment A: Contract Infosend, Inc., Amendment No. 2 (S23184693) APPROVED BY:

Dean Batchelor, Director Utilities
Staff: Catherine Elvert, Utilities Communications Manager Year Original Amendment Total
1 85,000$ 50,000$ 135,000$
2 85,000$ 125,000$ 210,000$
3 85,000$ 125,000$ 210,000$
Total 255,000$ 300,000$ 555,000$
Table 2: Breakdown of Amendment
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AMENDMENT NO. 2 TO CONTRACT NO. S23184693

BETWEEN THE CITY OF PALO ALTO AND
INFOSEND, INC.

This Amendment No. 2 (this “Amendment”) to Contract No. S23184693 (the “Contract” as defined below) is entered into as of January 22, 2024 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and INFOSEND, INC., a California Corporation, located at 4240 E. La Palma Ave., Anaheim, CA 92807 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment.

R E C I T A L S

A. T he Contract (as defined below) was entered into by and between the Parties hereto for the provision of printing services, as detailed therein.

B. T he Parties now wish to amend the Contract in order to increase compensation by Three Hundred Thousand Dollars ($300,000) from Two Hundred Fifty-Five Thousand ($255,000) to a new total not to exceed amount of Five Hundred Fifty-Five Thousand Dollars ($555,000) with no change to the contract term, and to amend the schedule of rates.

NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree:

SECTION 1. Definitions. The following definitions shall apply to this Amendment:

a. Contract. The term “Contract” shall mean Contract No. S23184693 between CONSULTANT and CITY, dated February 1, 2023 as amended by:

Amendment No. 1, dated September 6, 2023

b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract.

SECTION 2. Section 4 “NOT TO EXCEED C OMPENSATION” of the Contract is hereb y amended to read as follows:

“The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Five Hundred Fifty-Five Thousand Dollars ($555,000). The yearly rate for year one is not to exceed One Hundred Thirty -Five Thou sand Dollars ($135,000) and years two and three shall not exceed Two Hundred Ten Thousand dollars ($210,000) per year. The hourly schedule of rates, if applicable, is set out in Exhibit C- 1, entitled “SCHEDULE OF RATES.” Any work performe d or expenses incurred for which DocuSign Envelope ID: 806F3512-AEDD-452F-9ACF-A0136EE03EA2 Item 5
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Amendment No. 2
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payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY.”

SECTION 4. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference:

a. Exhibit “C -1” entitled “ SCHEDULE OF RATES ”, AMENDED, REPLACES PREVIOUS.

SECTION 5. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect.

SECTION 6. Incorporation of Recitals . The recita ls set forth above are terms of this Amendment and are fully incorporated herein by this reference.

(SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.)

DocuSign Envelope ID: 806F3512-AEDD-452F-9ACF-A0136EE03EA2 Item 5
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Amendment No. 2
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SIGNATURES OF THE PARTIES

IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written.

CITY OF PALO ALTO

_____________________________
City Manager

APPROVED AS TO FORM:

_____________________________
City Attorney or designee

INFOSEND, INC.

Officer 1

By:______________________________

Name:___________________________

Title:____________________________

Officer 2

By:______________________________

Name:___________________________

Title:____________________________

Attachments:

EXHIBIT “C-1” “SCHEDULE OF RATES” (AMENDED, REPLACES PREVIOUS)

DocuSign Envelope ID: 806F3512-AEDD-452F-9ACF-A0136EE03EA2 President
Russ Rezai
Executive Vice President
Roxana Weil
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EXHIBIT C-1
SCHEDULE OF RATES AMENDMENT NO. 1
(AMENDED, REPLACES PREVIOUS)

CONSULTANT’S schedule of rates is as follows but not limited to the following:

BID
ITEM

DESCRIPTION, WITH UNIT PRICE IN WORDS (PRICE IS INCLUSIVE

OF ALL APPLICABLE TAXES)

UNIT PRICE

1 03-compost-giveaway-station-march
$ 0.16 Sample Item No. 1 from the RFP Attachment E – Cost Proposal 2 Bill Insert
$ 0.16
Sample Item No. 2 from the RFP Attachment E – Cost Proposal 3 cpau_smartenergybooklet2018_v03
$ 1.00
Sample Item No. 3 from the RFP Attachment E – Cost Proposal

4 cpauwaterannual2020
$ 0.80
Sample Item No. 4 from the RFP Attachment E – Cost Proposal

5 CS 100 Door Hanger
$ 0.50
Sample Item No. 5 from the RFP Attachment E – Cost Proposal

6 Door Hanger
$ 0.65
Sample Item No. 6 from the RFP Attachment E – Cost Proposal

7 envelope2
$ 0.40
Sample Item No. 7 from the RFP Attachment E – Cost Proposal

8 Envelope
$ 0.40
Sample Item No. 8 from the RFP Attachment E – Cost Proposal

9 gas-safety-brochure-2021-no-crops
$ 0.18
Sample Item No. 9 from the RFP Attachment E – Cost Proposal

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Amendment No. 2
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BID
ITEM

DESCRIPTION, WITH UNIT PRICE IN WORDS (PRICE IS

INCLUSIVE OF ALL APPLICABLE TAXES)

UNIT PRICE

10 Letter head
$ 0.10
Sample Item No. 10 from the RFP Attachment E – Cost Proposal 11 Meter Read Cards a
$ 0.20
Sample Item No. 11 from the RFP Attachment E – Cost Proposal

12 Meter Read Cards b
$ 0.20
Sample Item No. 12 from the RFP Attachment E – Cost Proposal

13 pal032-billinsert-ev-3.2021
$ 0.18
Sample Item No. 13 from the RFP Attachment E – Cost Proposal

14 pal035-billinsert-water-3.2022revise
$ 0.16
Sample Item No. 14 from the RFP Attachment E – Cost Proposal

15 pal035-billinsert-water-3.2022revise- commercial
$ 0.16
Sample Item No. 15 from the RFP Attachment E – Cost Proposal

16 palo-alto-fiber-conversation-utility-insert-new
$ 0.16
Sample Item No. 16 from the RFP Attachment E – Cost Proposal

17 printing services
$ 0.10
Sample Item No. 17 from the RFP Attachment E – Cost Proposal 18 uaag-final-2021-brochure-insertct
$ 1.00
Sample Item No. 18 from the RFP Attachment E – Cost Proposal

19 utility-insert-2.14-for-web
$ 1.00
Sample Item No. 19 from the RFP Attachment E – Cost Proposal

20 AMI/Water Heating RES H20 Energy Tips
$ 0.174
7x11, 4/4, folded to 7x3.67, 100% Recycled
DocuSign Envelope ID: 806F3512-AEDD-452F-9ACF-A0136EE03EA2 Item 5
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21 RES Jan EV Charge RES Nov 2023 Heat Pump Water Heater $ 0.095
7x3.5, 100% Recycled 80# gloss book

22 Green Resources Guide
$ 4.83
Digital print 4/4 8.5x5.5 20 pg. self-booklets on 100# gloss book w/100% recycled, Fold & Saddle stitch Carton Pack

23 CCR Postcards EDDM mailing to Residents, Businesses & Po boxes $ 0.137

3.88x9.25 Postcards on 100# 100% Recycled Gloss Cover

24 Letter
$ 0.293

8.5x15.5 letter on 100% recycled 60# offset, #10 printed 1/0 envelope

*Actual pricing will be provided at time of order and based on actual quantity. Unit pricing will remain constant. Recycled papers will be utilized if available. Total item price will be provided at time of order and based on actual quantity. The City does not guarantee a minimum or maximum order quantity. The total compensation for year one is not to exceed One Hundred Thirty-Five Thousand Dollars ($135,000) and years two and three shall not exceed Two Hundred Ten Thousand dollars ($210,000) per year.

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: February 5, 2024
Report #:2401-2481
TITLE
Approval of Contract No. C23187298C with Hinderliter, de Llamas, and Associates (HdL) for Business Tax and Business Registry Certificate Program Fee Consulting Services in a Total Not- To-Exceed Amount of $860,555 Over a Three-Year Term; CEQA Status – Not a Project

RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or his designee to execute the attached contract with Hinderliter, de Llamas, and Associates (HdL) (Attachment A, Contract No. C23187298C) in an amount not-to-exceed $860,555 for business tax and business registry certificate program fee program administration, fee payment collection, reporting, and compliance services over a three-year term ending June 30, 2026.

EXECUTIVE SUMMARY
Staff recommends that Council approve the attached contract with HdL for ongoing administration, collection, and compliance activities for the BT and BRC. HdL has implemented the City’s filing and payment portal for the Business Tax (BT) and Business Registry Certificate (BRC) program. To expedite implementation, staff executed a contract in fall 2023, totaling $30,000 for implementation services, targeting October 2023 as go live for the filing and payment portal. HdL completed the project, along with supporting stakeholder engagement sessions.

BACKGROUND
A Request for Proposal (RFP) for tax and fee consulting services was issued in Spring 2023. The RFP solicited proposals for support administration, reporting, and auditing of certain taxes and to also implement the City’s new Business Tax (BT), as passed by the voters in November 2022.

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On June 19, 20231, the City Council approved contract number C23187298A with MuniServices, LLC for tax and fee consulting services. Tasks in the contract include:

1. Sales tax analysis, information, and reporting services

2. Administration, reporting, and audit services for:
a. Business Tax (BT)
b. Business Registry Certificate Program (BRC)
c. Business Improvement District (BID)
d. Transient Occupancy Tax (TOT)
e. Telephone Users Tax (TUT)
In June 2023, the City Council approved a contract with MuniServices for BT and BRC administration, collection, and compliance services. In August 2023, the City issued a notice to MuniServices partially suspending services item #2a and #2b in the above list due to failure to adhere to the schedule of performance (see Exhibit B of contract number C23187298A) for implementation of BT collection services.

HdL submitted a proposal for the RFP issued in Spring 2023 and was the only other firm to submit a proposal for BT and BRC administration and collection services. Staff executed a contract totaling $30,000 for BT and BRC implementation costs. The attached contract is for the ongoing administration and collection of the BT and BRC.

ANALYSIS
Procurement Process
Detailed discussion of the procurement process for these services can be found in the June 19, 2023 report to CouncilError! Bookmark not defined.. Below is a summary of the RFP process:

Table #1: Summary of Request for Proposal2
Proposal Description Tax and Fee Consulting Services (RFP #187298) Issue Date February 9, 2023
Proposed Length of Project Ongoing
Number of Vendors Notified 1,485
Number of Proposal Packages Downloaded 12
Proposal Due Date / Total Days to Respond
to Proposal
March 2, 2023 / 22 calendar days
Pre-Proposal Meeting None
1 City Council, June 19, 2023, Item #33, Report #2304-1337:
https://portal.laserfiche.com/Portal/DocView.aspx?repo=r-704298fc&id=65895 2 Tax and Fee Consulting Services Request for Proposal posted on PlanetBids:
https://pbsystem.planetbids.com/portal/25569/bo/bo-detail/102065 Item 6
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Table #1: Summary of Request for Proposal2
Number of Proposals Received Three
Proposal Price Range $111,800 to $1,292,300
Public Link to Solicitationhttps://pbsystem.planetbids.com/portal/25569/ bo/bo-detail/102065
Based on the evaluation committee review, MuniServices was selected for tax and fee collection and administration services. HdL submitted a proposal for the same services as MuniServices and was ranked second for these services, after MuniServices. However, through the implementation of the Business Tax, a change to a new provider was necessary to ensure a supported and timely implementation of the new business tax. HdL, as the second highest scored provider was evaluated and engaged to assist in administration of this tax as discussed above.

Table 2 compares fees for the BT and BRC services with HdL and previous contract with MuniServices for ongoing administration of the Business Tax and Business Registry Program (BRC). The attached contract with HdL assumes a three-year term, while the contract with MuniServices was a five-year term. The table below includes three-year costs for comparison purposes. Total basic services and additional services in the three-year HdL agreement is $860,055, while the three-year contract with MuniServices was $898,050. While this shorter agreement term represents a 4.4% increase in cost, staff and HdL significantly increased compliance and enforcement services, from approximately $20,000 per year to $117,425 per year, to bolster discovery efforts and shift from as needed compliance review and audit to quarterly compliance review and ongoing tax audit. Maintaining this increased level of audit and compliance review will ensure more accurate and solid tax and demographic data for BT and BRC on an ongoing basis. While collection and administration services increased by approximately 12% annually, HdL has demonstrated robust engagement, support, and capacity to problem solve.

Table #2: Cost Comparison of HdL and MuniServices Contracts

SERVICE PREVIOUS
$163,610/YEAR
NEW
APPROX. $259,865/YEAR
Collection &
Administration
5-yr basic services: $718,050
(approx. $143,610/year)
Annual flat fee: $10,000
Annual $13/participant fee
3-yr basic services: $424,320
(approx. $141,440/yr)
Per processed account fee: $17/ per filing
(~4 filings per year for each business)
Compliance &
Enforcement
5-yr basic services: $100,000
(3approx. $20,000/yr)
Discovery:

Minimum annual fee: $7,500
35% contingency
3-yr basic services: $352,275
(approx. $117,425/yr)
Discovery & Audit: 35% applied to all
monies received resulting from consultant
discovery and audit work
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Implementation costs are not listed in the above table, however both firms proposed $30,000 for this task.

Business Tax Implementation
The BT and BRC filing and payment portal went live in early October 2023. The implementation calendar can be found on the City’s website3. Collection and administration of the business tax portal will be done by HdL. The 2023 calendar year business tax filing was due January 1 and businesses have until the end of January to file without penalty or interest. Staff and HdL, have been actively meeting with business to provide support through notifications, information sessions, and individual virtual consultations, assisting larger businesses with complex filings and helping smaller businesses simplify their filings.

Temporary staff resources are dedicated to manage the program; provide in-house tax administrator support (as defined by the business tax ordinance); tax analysis and review beyond the consultant’s scope of work; and customer service and support for the City’s business community. The Administrative Services Department (ASD) will evaluate future staffing needs once service needs have stabilized and filings are submitted and processed at a regular, quarterly cadence.

FISCAL/RESOURCE IMPACT
As discussed, the service cost for BT and BRC administration, collection, and compliance services are higher with HdL compared to the previous consultant. HdL has demonstrated adherence to the City’s implementation timeline and responsive customer service and expertise in implementation and the ongoing administration of the business tax. The average annual cost of the agreement with HdL is $259,865, approximately fifty percent more of what was included in the FY 2024 Adopted Budget ($177,000). Staff will include a request in the FY 2024 Mid-Year Budget Review for $41,000 ($217,850 basic service costs for FY 2024, less $177,000 included in the FY 2024 Adopted Operating Budget). Funding for future contract years will be subject to City Council review through the annual budget process.

First year cost to implement and begin collection of the business tax is estimated to be $247,850, broken down as follows:
•Implementation: $30,000 (separate contract with HdL)
3 www.cityofpaloalto.org/businesstax
Audit: $100/hour Collection: 25% applied to all revenue received
Payment Processing N/A 3-yr basic services: $3,000
ACH/eCheck fee: $0.50/transaction
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•Administration and Collection: $136,000
•Compliance and Enforcement: $80,850
•Payment Processing: $1,000
During the development of the business tax, preliminary administrative cost estimates ranged between $0.5 million to $1.0 million. Business tax revenue, net of administrative expense, will be allocated each year as part of the City Council’s annual budgeting process, per the Advisory Spending Guidelines for Business Tax Proceeds that were adopted by Council on August 22, 20224. In total, current administrative costs for tax administration are estimated at $0.6 million including the recommended contract ($0.3 million) and staff resources ($0.3 million). A formal action to adjust the Table of Organization will be forth coming in a future budget process as staff continues to assess needs through the implementation process versus ongoing administration, collection and enforcement, as noted above, this program is currently using the equivalent of 1.0 FTE to support administration.

STAKEHOLDER ENGAGEMENT
Engagement with the business community has been extensive including information sessions, individual appointments for support, and targeted discussion with both large and small companies to support a smooth roll out of the new business tax. HdL has been instrumental in providing this facilitation and service. Staff worked closely to evaluate and select the contract award for these services given the importance and complexities of this new tax.

ENVIRONMENTAL REVIEW
This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA Guidelines, section 15378(b)(4) (government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment).

ATTACHMENTS
Attachment A: Contract No. C23187298C with Hinderliter, de Llamas, and Associates (HdL) Business Tax and Business Registry Program Fee Consulting Services APPROVED BY:

Kiely Nose, Assistant City Manager
4 City Council, August 22, 2022, Item #AA1: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes- reports/agendas-minutes/city-council-agendas-minutes/2022/20220822/20220822pccsm-amended-redacted- linked.pdf#page=313
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Rev. Dec.15, 2020

CITY OF PALO ALTO CONTRACT NO. C23187298C

AGREEMENT FOR PROFESSIONAL SERVICES

BETWEEN THE CITY OF PALO ALTO AND HINDERLITER DE LLAMAS &

ASSOCIATES (HDL)

This Agreement for Professional Services (this “Agreement”) is entered into as of the 1st day of October, 2023 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and HINDERLITER DE LLAMAS & ASSOCIATES (HDL) a California Corporation located at 120 S. State College Blvd. Suite 200, Brea, California 92821 (“CONSULTANT”).

The following recitals are a substantive portion of this Agreement and are fully incorporated herein by this reference:

RECITALS

A. CITY intends to engage in business tax and business registry (the “Project”) and desires to engage a consultant to provide the administration, collection, enforcement, compliance, and audit activities for the City’s business tax and business registry certificate program in connection with the Project (the “Services”, as detailed more fully in Exhibit A).

B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services.

C. CITY, in reliance on these representations , desires to engage CONSULTANT to provide the Services as more fully described in Exhibit A, entitled “SCOPE OF SERVICES”.

NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree as follows:

SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit A in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY.

SECTION 2. TERM.

The term of this Agreement shall be from the date of its full execution through June 30, 2026 unless terminated earlier pursuant to Section 19 (Termination) of this Agreement.

SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit B, entitled “SCHEDULE OF PERFORMANCE”. Any Services for which times for performance are not specified in this DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT.

CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT.

SECTION 4. NOT TO EXCEED COMPENSATION . The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Seven Hundred Eighty- Two Tho usand, Five Hundred Ninety -Five Dollars ($782,595.00). The hourly schedule of rates, if applicable, is set out in Exhibit C -1, entitled “ SCHEDULE OF RATES.” Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY.

Optional Additional Services Provision (This provision applies only if checked and a not-to-exceed compensation amount for Additional Services is allocated below under this Section 4.)

In addition to the not-to-exceed compensation specified above, CITY has set aside the not- to-exceed compensation amount of Seventy-Seven Thousand Nine Hundred Sixty Dollars ($77,960.00) for the performance of Additional Services (as defined below). The total compensation for performance of the Services, Additional Services and any reimbursable expenses specified in Exhibit C , shall not exceed Eight Hundred Sixty Thousand, Five Hundred Fifty-Five Dollars ($860,555.00), as detailed in Exhibit C.

“Additional Services” means any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit A. CITY may elect to, but is not required to, authorize Additional Services up to the maximum amount of compensation set forth for Additional Services in this Section 4. CONSULTANT shall provide Additional Services only by advanced, written authorization from CITY as detailed in this Section . Additional Services , if any, shall be authorized by CITY with a Task Order assigned and authorized by CITY’s Project Manager, as identified in Section 13 (Project Management). Each Task Order shall be in substantially the same form as Exhibit A-1, entitled “PROFESSIONAL SERVICES TASK ORDER”. Each Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the provisions of this Agreement. Compensation for Additional Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum.

To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY’s Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter-signature by the CITY Project Manager), the fully exec uted Task Order shall become part of this Agreement. The cumulative total compensation to CONSULTANT for all Task Orders authorized under this Agreement shall not exceed the amount of compensation set forth for Additional Services in this Section 4 .

CONSULTANT shall only be compensated for Additional Services performed under an authorized Task Order and only up to the maximum amount of compensation set forth for DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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Additional Services in this Section 4 . Performance of and payment for any Additional Services are subject to all requirements and restrictions in this Agreement.

SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the Services performed and the applicable charges (including , if applicable, an identification of personnel who performed the Services, hours worked, hourly rates, and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT’s schedule of rates set forth in Exhibit C-1. If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s invoices shall be subject to verification by CITY. CONSULTANT shall send all invoices to CITY’s Project Manager at the address specified in Section 1 3 (Project Management) below. CITY will generally process and pay invoices within thirty (30) days of receipt of an acceptable invoice.

SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it , its employees and subcontractors, if any, possess the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill an d experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subcontractors, if any, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All Services to be furnished by CONSULTANT under this Agreement s hall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances.

SECTION 7. COMPLIANCE WITH L AWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services u nder this Agreement , as amended from time to time . CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services.

SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services , arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, an y change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions.

SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds the CITY’s stated construction budget by ten percent (10%) or more , CONSULTANT shall make recommendations to CITY for aligning the P roject design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY.

SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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deemed at all times to be an independent contractor and shall be wholly responsible for the manner in which CONSULTANT performs the Services requested by CITY under this Agreement.

CONSULTANT and any agent or employee of CONSULTANT will not have employee status with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY pertaining to or in connection with any retirement, health or other benefits that CITY may offer its employees. CONSULTANT wi ll be responsible for all obligations and payments, whether imposed by federal, state or local law, including, but not limited to, FICA, income tax withholdings, workers’ compensation, unemployment compensation, insurance, and other similar responsibilities re lated to CONSULTANT’s performance of the Services, or any agent or employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as creating an employment or agency relationship between CITY and CONSULTANT or any agent or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY shall be construed as providing for direction as to policy and the result of CONSULTANT’s provision of the Services only, and not as to the means by which such a result is obtained.

SECTION 11. ASSIGNMENT . The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written approval of the City Manager. Any purported assignment made without the prior written approval of the City Manager will be void and without effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, succes sors, executors, administrators and assignees of the parties.

SECTION 12. SUBCONTRACTING.

Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the Services to be performed under this Agreement without the prior written authorization of the City Manager or designee. In the event CONSULTANT does subcontract any portion of the work to be performed und er this Agreement, CONSULTANT shall be fully responsible for all acts and omissions of subcontractors.

CONSULTANT shall be responsible for directing the work of any subcon tractors and for any compensation due to subcon tractors. CITY assumes no respo nsibility whatsoever concerning compensation of subcontractors. CONSULTANT shall be fully responsible to CITY for all acts and omissions of subcon tractors. CONSULTANT shall change or add subcon tractors only with the prior written approval of the City Manager or designee.

SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Josh Davis as the CONSULTANT’s Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and represent CONSULTANT during the day -to-day performance of the Services. If circumstances cause the substitution of the CONSULTANT’s Project Manager or any other of CONSULTANT’s key personnel for any reason, the appointment of a substitute Project Manager and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s Project Manager. CONSULTANT, at CITY’s request, shall promptly remove CONSULTANT personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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or timely completion of the Services or a threat to the safety of persons or property.

CITY’s Project Manager is Josie Stokes, Administrative Services Department, Revenue Division, 250 Hamilton Avenue Palo Alto, CA, 94301, Telephone: 650-329-2291. CITY’s Project Manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate Project Manager from time to time.

SECTION 1 4. OWNERSHIP OF MATERIALS . All work product, including without limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications, computations, models, recordings, data, documents, and other materials and copyright interests developed under this Agreement, in any form or media, shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work product pursuant to this Agreement are vested in CITY, and CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual property rights in favor of CITY. Neither CONSULTANT nor its subcontractors, if any, shall make any of such work product available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the Scope of Services.

SECTION 15. AUDITS . CONSULTANT agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for four (4) years from the date of final payment, CONSULTANT’s records pertaining to matters covered by this Agreement, including without limitation records demonstrating compliance with the requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain and retain accurate books and records in accordance with generally accepted accounting principles for at least four (4) years after the expiration or earlier termination of this Agreement or the completion of any audit hereunder, whichever is later.

SECTION 16. INDEMNITY.

[ 16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its office rs, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party.

16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from a Claim arising from the active negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of, or by any omission to perform a duty imposed by law or agreement by, CONSULTANT, its officers, employees, agents or contractors under this Agreement.

16.3. The acceptance of CONSULTANT’s Services and duties by CITY shall not DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement.

16.4 Except in cases where such failure is attributable to CONSULTANT’s failure to perform under this Agreement, negligence, or will misconduct, CONSULTANT shall not be liable for any Client monies not collected by CONSULTANT, or any special, incidental, or consequential damages of any nature whatsoever, even if such restrictions deprive one or more remedies of their essential purpose. This damage exclusion is independent of any remedies provided for herein.

SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under this Agreement is effective unless it is in writing in accordance with Section 2 9.4 of this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted shall apply solely to the specific instance expressly stated. No single or partial exercise of any right or remedy will preclude any other or further exercise of any right or remedy.

SECTION 18. INSURANCE.

18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit D, entitled “INSURANCE REQUIREMENTS”. CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies.

18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A -:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above.

18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Mana ger thirty (30) days’ prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement.

18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT ’s liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstandin g the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired.

SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.

19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving thirty (30) days prior written notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided under this Agreement or at law, the City Manager may terminate this Agreement sooner upon written notice of termination. Upon receipt of any notice of suspension or termination, CONSULTANT will discontinue its performance of the Services on the effective date in the notice of suspension or termination.

19.2. In event of suspension or termination, CONSULTANT will deliver to the City Manager on or before the effective date in the notice of suspension or termination, any and all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed, prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such work product is the property of CITY, as detailed in Section 14 (Ownership of Materials).

19.3. In event of suspension or termination, CONSULTANT will be paid for the Services rendered and work products delivered to CITY in accordance with the Scope of Services up to the effective date in the notice of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s Services provided in material conformity with this Agreement as such determination is made by the Ci ty Manager acting in the reasonable exercise of his/her discretion . The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25, 27, 28, 29 and 30.

19.4. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement, unless made in accordance with Section 17 (Waivers).

SECTION 20. NOTICES.

All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows:

To CITY: Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303

With a copy to the Purchasing Manager

To CONSULTANT: Attention of the Project Manager at the address of DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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CONSULTANT recited on the first page of this Agreement.

CONSULTANT shall provide written notice to CITY of any change of address.

SECTION 21. CONFLICT OF INTEREST.

21.1. In executing this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services.

21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subcontractors or other persons or parties having such an interest.

CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California, as amended from time to time . CONSULTANT agrees to notify CITY if any conflict arises.

21.3. If the CONSULTANT meets the definition of a “Consultant” as defined by the Regulations of the Fair Political Practices Commission, CONSULTANT will file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act of 1974, as amended from time to time.

SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA.

22.1. As set forth in Palo Alto Municipal Code Section 2.30.510, as amended from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section

2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment.

22.2. CONSULTANT understands and agrees that pursuant to the Americans Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor or subcontractor, are required to be accessible to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a manner that complies with the ADA and any other applicable federal, state and local disability rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate against persons with disabilities in the provision of services, benefits or activities provided under this Agreement.

SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department , hereby incorporated by reference and as amended from time to time. CONSULTANT shall comply with DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include , first, minimizing and reducing waste; second, reusing waste ; and, third, recycling or composting waste. In part icular, C ONSULTANT shall comply with the following Zero Waste requirements:
(a) All printed materials provided by CONSULTANT to C ITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwi se approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable-based inks. (b) Goods purchased by C ONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Department’s office.
(c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed.

SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE .

CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the Cit y, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code Section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regardin g the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code Section 4.62.060.

SECTION 25. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Co de, as amended from time to time. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement.

SECTION 2 6. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS.

26.1. This Project is not subject to prevailing wages and related requirements. CONSULTANT is not required to pay prevailing wages and meet related requirements under the California Labor Code and California Code of Regulations in the performance and implementation of the Project if the contract:
(1) is not a public works contract;
(2) is for a public works construction project of $25,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or (3) is for a public works alteration, demolition, repair, or maintenance project of $15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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1773.3(j).

SECTION 27. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS”. For purposes of this Section 27, a “9204 Public Works Project” means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. (Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code Section 9204, for Public Works Projects , certain claims procedures shall apply , as set forth in Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”.

This Project is not a 9204 Public Works Project.

SECTION 28. CONFIDENTIAL INFORMATION.

28.1. In the performance of this Agreement, CONSULTANT may have access to CITY’s Confidential Information (defined below). CONSULTANT will hold Confidential Information in strict confidence, not disclose it to any third party, and will use it only for the performance of its obligations to CITY under this Agreement and for no other purpose.

CONSULTANT will maintain reasonable and appropriate administrative, technical and physical safeguards to ensure the security, confidentiality and integrity of the Confidential Information.

Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its employees, agents and subcontractors, if any, to the extent they have a need to know in order to perform CONSULTANT’s obligations to CITY under this Agreeme nt and for no other purpose, provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality and security obligations of this Agreement.

28.2. “Confidential Information” means all data, information (including without limitation “Personal Information” about a California resident as defined in Civil Code Section 1798 et seq., as amended from time to time) and materials, in any form or media, tangible or intangible, provided or otherwise made available to CONSULTANT by CITY, d irectly or indirectly, pursuant to this Agreement. Confidential Information excludes information that CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it was provided or has subsequently become publicly known other than by a breach of this Agreement; (ii) was rightfully in CONSULTANT’s possession free of any obligation of confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by CONSULTANT from a third party without breach of any confidentia lity obligation; (iv) is independently developed by employees of CONSULTANT without any use of or access to the Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an authorized representative of CITY.

28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to the extent required by order of a court of competent jurisdiction or governmental body, provided that CONSULTANT will notify CITY in writing of such order immediately upon receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing so), to give CITY an opportunity to oppose or otherwise respond to such order.

28.4. CONSULTANT will notify City promptly upon learning of any breach in DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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the security of its systems or unauthorized disclosure of, or access to, Confidential Information in its possession or control, and if such Confidential Information consists of Personal Information, CONSULTANT will provide information to CITY sufficient to meet the notice requ irements of Civil Code Section 1798 et seq., as applicable, as amended from time to time.

28.5. Prior to or upon termination or expiration of this Agreement, CONSULTANT will honor any request from the CITY to return or securely destroy all copies of Confidential Information. All Confidential Information is and will remain the property of the CITY and nothing contained in this Agreement grants or confers any rights to such Confidential Information on CONSULTANT.

28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions.

SECTION 29. MISCELLANEOUS PROVISIONS.

29.1. This Agreement will be governed by California law, without regard to its conflict of law provisions.

29.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California.

29.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys’ fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees pai d to third parties.

29.4. This Agreement, including all exhibits, constitutes the entire and integrated agreement between the parties with respect to the subject matter of this Agreement, and supersedes all prior agreements, negotiations, representations, statements and undertakings, either oral or written. This Agreement may be amended only by a written instrument, which is signed by the authorized representatives of the parties and approved as required under Palo Alto Municipal Code, as amended from time to time.

29.5. If a court of competent jurisdiction finds or rules that any provision of this Agreement is void or unenforceable, the unaffected provisions of this Agreement wi ll remain in full force and effect.

29.6. In the event of a conflict between the terms of this Agreement and the exhibits hereto (per Section 30) or CONSULTANT’s proposal (if any), the Agreement shall control. In the event of a conflict between the exhibits hereto and CONSULTANT’s proposal (if any), the exhibits shall control.

29.7. The provisions of all checked boxes in this Agreement shall apply to this Agreement; the provisions of any unchecked boxes shall not apply to this Agreement.

DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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29.8. All section headings contained in this Agreement are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement.

29.9. This Agreement may be signed in multiple counterparts, which, when executed by the authorized representatives of the parties, shall together constitute a single binding agreement.

SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is selected below, is hereby attached and incorporated into this Agreement by reference as though fully set forth herein:

EXHIBIT A: SCOPE OF SERVICES
EXHIBIT B: SCHEDULE OF PERFORMANCE
EXHIBIT C: COMPENSATION
EXHIBIT C-1: SCHEDULE OF RATES
EXHIBIT D: INSURANCE REQUIREMENTS

THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS ARE ATTACHED.

DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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CONTRACT No. C23187298C SIGNATURE PAGE

IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement as of the date first above written.

CITY OF PALO ALTO

City Manager

APPROVED AS TO FORM:

City Attorney or designee

HINDERLITER DE LLAMAS &
ASSOCIATES (HdL)

Officer 1
By:

Name:

Title:

Officer 2
By:

Name:

Title:

DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Andrew Nickerson
President
Richard Park
CFO
Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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EXHIBIT A

SCOPE OF SERVICES

CONSULTANT shall provide the Services detailed in this Exhibit A, entitled “SCOPE OF SERVICES”.

CONSULTANT (HdL) will provide the following services relative to the administration, collection, enforcement, compliance, and audit activities for the City’s business tax and business registry certificate program:

1. Operations Management Services

1.1. Establish and maintain database of businesses for the business registry certificate program and business tax.

1.2. Receive and process, in a timely fashion:

1.2.1. Business registry applications, renewals and payments, and.

1.2.2. Business tax filings, amended returns, and payments.

1.3. Renewal and payment notices:

1.3.1. Business registry renewal notices will be sent renewal notices to active businesses within 30 days of the renewal period end date or at another interval specified by CITY.

1.3.2. Business tax payment reminder notices will be sent within 30 days of the tax payment due date or at another interval specified by CITY.

1.4. Provide businesses multiple options for submitting applications, renewals, tax filing, payments, or support requests (including via website, email, mail, phone, and fax).

1.4.1. Have experience and capabilities to process business payments, renewals, delinquent payments and ongoing monitoring and administration of CITY’s business registry certificate program and business tax, as described in the CITY’s municipal code, ordinances, policies and program procedure manuals.

1.4.2. Consultant specialists will be available for live interactions Monday through Friday, 8:00am to 5:00pm Pacific).

1.4.3. Respond to business correspondence via return phone call or written correspondence within 24 hours.

1.5. Remit revenue to CITY no less than monthly, along with detail of business registry applications, business tax filings, and any additional documentation.

1.6. Provide CITY staff access to website portal offering business registry inquiry, reporting, and electronic department approval capabilities.

2. Compliance Services: 1) Identify and register businesses which are subject to business registry certificate program and/or business tax, 2) collect known debt as pertains to business registry certificate and/or business tax, and 3) identify under-reported registration fee and/or tax liability.

2.1. Discovery Services

2.1.1. Develop a list of businesses subject to CITY business registry certificate or taxation.

2.1.2. Notify non-compliant businesses of their options to comply or dispute their non- compliant status. Notification and support to businesses will be facilitated through the website, mail, email, phone and/or fax.

2.1.3. Review information and forms submitted by the business for completion and accuracy, DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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inclusive of any additional required documentation (i.e. home occupation permit). All submissions are filed and stored electronically and made available to CITY upon request.

2.1.4. Provide businesses with detailed invoicing and options to pay via website, mail, and phone.

2.1.5. Remit revenue to CITY no less than monthly, along with detail of business registry applications, business tax filings, and any additional documentation.

2.2. Collection Services

2.2.1. Identify businesses subject to CITY business registry certificate or taxation which have known debt to CITY and have failed to pay within an appropriate time frame.

2.2.2. Notify businesses of their options to comply or dispute their non-compliant status.

2.2.3. Provide businesses with detailed invoicing and options to pay via website, mail and phone.

2.2.4. Remit revenue to CITY no less than monthly, along with detail of business registry applications, business tax filings, and any additional documentation.

2.3. Audit Services

2.3.1. Identify potential under-reporting and/or misclassified businesses.

2.3.2. Audit businesses mutually agreed to by CITY and CONSULTANT that are identified as potential under-reporting businesses.

2.3.3. Submit audit summaries to CITY and discuss further actions.

2.3.4. Educate businesses on proper reporting practices.

2.3.5. Invoice and collect identified delinquencies.

3. Payment Processing – services include PCI compliant payment processing services powered by FIS Global, which supports both credit card (taxpayer funded) and eCheck (CITY funded) transactions.

3.1. CITY Responsibilities

3.1.1. As a condition to its receipt of the Service, CITY shall execute and deliver any and all applications, agreements, certifications or other documents required by FIS Global, Networks or other third parties whose consent or approval is necessary for the processing of Transactions by FIS Global. “Network” is an entity or association that operates, under a common service mark, a system which permits participants to authorize, route, and settle Transactions among themselves, including, for example, networks operated by VISA USA and Mastercard, Inc., NYCE Corporation, American Express, and Discover.

3.1.2. CITY hereby grants CONSULTANT the full right, power and authority to request, receive and review any Data or records reflected in a Transaction report. CITY represents and warrants that it has the full right and authority to grant these rights.

DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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EXHIBIT B

SCHEDULE OF PERFORMANCE

CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the Project Managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed (“NTP”) from the CITY.

Milestones
Completion
Number of Days/Weeks (as specified below)
from NTP

1. Task 1: Operations Management Services Ongoing with first collection cycle beginning October 2023; filing and collection occurring
quarter beginning January 2024.

2. Task 2: Compliance Services
a. Discovery
b. Collection
c. Audit
Ongoing

3. Task 3: Payment Processing Ongoing

Optional Schedule of Performance Provision for On-Call or Additional Services Agreements. (This provision only applies if checked and only applies to on-call agreements per Section 1 or agreements with Additional Services per Section 4.)

The schedule of performance shall be as provided in the approved Task Order, as detailed in Section 1 (Scope of Services) in the case of on-call Services, or as detailed in Section 4 in the case of Additional Services, provided in all cases that the schedule of performance shall fall within the term as provided in Section 2 (Term) of this Agreement.

DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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EXHIBIT C

COMPENSATION

CITY agrees to compensate CONSULTANT for Services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the rate schedule attached as Exhibit C-1 up to the not to exceed budget amount for each task set forth below.

CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below , provided that the total compensation for the Services, including any specified reimbursable expenses, and the total compensation for Additional Services (if any, per Section 4 of the Agreement) do not exceed the amounts set forth in Section 4 of this Agreement.

CONSULTANT agrees to complete all Services , any specified reimbursable expenses, and Additional Services (if any, per Section 4), within this/these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY.

DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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BUDGET SCHEDULE

REIMBURSABLE EXPENSES

CONSULTANT’S ordinary business expenses , such as administrative, overhead, administrative support time/overtime, information systems, software and hardware, photocopying, telecommunications (telephone, internet), in-house printing, insurance and other ordinary business expenses, are included within the scope of payment for Services and are not reimbursable expenses hereunder.

Reimbursable expenses, if any are specified as reimbursable under this section, will be reimbursed at actual cost. The expenses (by type, e.g. travel) for which CONSULTANT will be reimbursed are: TRAVEL EXPENSE up to the not-to-exceed amount of: 3,000.00.

BUDGET SCHEDULE RATE EST. UNIT

NOT TO EXCEED
AMOUNT (3
YEARS)
YEAR 1
FY 2024
(10/1/2023-
6/30/2024)
YEAR 2
FY 2025
YEAR 3
FY 2026
Task 1: Operations Management Services
Includes all sub-tasks listed under Task 1 of Scope of Services. Fees are increased as of July 1 of each fiscal year based on the 12-month Bay Area Consumer Price Index (Urban Wage Earners and Clerical Workers, San Francisco-Oakland-San Jose) as of March 31, not to exceed 5%.

Max. Annual
CPI Adj 4% 4%
Per processed account fee - any account for which an application or renewal/return was processed, or active account which was sent a renewal notice $17.00 8,000 $424,320.00 $136,000.00 $141,440.00 $146,880.00 Task 2: Compliance Services

2.1: Discovery Services
Contingency percentage applies to all monies received for the current tax/license period and any other period collected (including monies received for taxes, penalities, interest, and fees).

In the event that CITY discovers a non-compliant business and reports to CONSULTANT, activity will be categorized as a collection service effort rather than a discovery service effort. 35% 231,000 $242,550.00 $80,850.00 $80,850.00 $80,850.00

2.2: Collection Services
Contingency percentage applies to revenues received as a result of compliance services. 25% 57,750 $28,875.00 N/A $14,437.50 $14,437.50

2.3: Audit Services
Contingency percentage applies to revenues received as a result of audit services 35% 231,000 $80,850.00 N/A N/A $80,850.00 Sub-Total: Compliance Services $352,275.00 $80,850.00 $95,287.50 $176,137.50 Task 3: Payment Processing
Taxpayer Funded:

Credit and debit card processing CITY authorizes CONSULTANT to collect covenience fee from taxpayer at the time of payment. 2.90% N/A N/A N/A N/A N/A Taxpayer Funded:

Returned payment/NSF fee, each occurance 25.00% N/A N/A N/A N/A N/A City Funded:

ACH/eCheck processing per transaction fee $0.50 2,000 $3,000.00 $1,000.00 $1,000.00 $1,000.00 TOTAL BASIC SERVICES $779,595.00 $217,850.00 $237,727.50 $324,017.50 REIMBURSEABLE EXPENSES $3,000.00 $1,000.00 $1,000.00 $1,000.00 ADDITIONAL SERVICES OR CONTINGENCY $77,960.00 $21,785.00 $23,773.00 $32,402.00 TOTAL NOT-TO-EXCEED $860,555.00 $240,635.00 $262,500.50 $357,419.50 DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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A. Travel outside the San Francisco Bay Area, including transportation and meals , if specified as reimbursable, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses.

All requests for reimbursement of expenses, if any are specified as reimbursable under this section, shall be accompanied by appropriate backup documentation and information.

DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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EXHIBIT C-1

SCHEDULE OF RATES

CONSULTANT’s schedule of rates is as follows:

Hourly Rate
Principal $325
Programmer $295
Senior Analyst $245
Analyst $195

DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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EXHIBIT D

INSURANCE REQUIREMENTS

CONSULTANTS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TER M OF THE

CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A -:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.

AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS AS SPECIFIED HEREIN.

REQUIRED TYPE OF COVERAGE REQUIREMENT

MINIMUM LIMITS
EACH

OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY

STATUTORY

STATUTORY STATUTORY STATUTORY
YES

GENERAL LIABILITY, INCLUDING

PERSONAL INJURY, BROAD FORM

PROPERTY DAMAGE BLANKET

CONTRACTUAL, AND FIRE LEGAL

LIABILITY

BODILY INJURY

PROPERTY DAMAGE

BODILY INJURY & PROPERTY
DAMAGE COMBINED.
$1,000,000

$1,000,000

$1,000,000

$1,000,000

$1,000,000

$1,000,000

YES

AUTOMOBILE LIABILITY,

INCLUDING ALL OWNED, HIRED,

NON-OWNED

BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE

PROPERTY DAMAGE

BODILY INJURY AND PROPERTY

DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000

$1,000,000

$1,000,000

$1,000,000
$1,000,000
$1,000,000

$1,000,000

$1,000,000

YES

PROFESSIONAL LIABILITY,

INCLUDING, ERRORS AND

OMISSIONS, MALPRACTICE (WHEN

APPLICABLE), AND NEGLIGENT

PERFORMANCE
ALL DAMAGES $1,000,000
YES

THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONSULTANT, AT ITS SOLE COST

AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM

OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURIN G NOT ONLY CONSULTANT AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.

I. INSURANCE COVERAGE MUST INCLUDE:

A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONSULTANT’S AGREEMENT TO INDEMNIFY CITY.

II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING EMAIL: [email protected]

III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL INSUREDS:

A. PRIMARY COVERAGE

WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,

INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR

CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS.

DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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B. CROSS LIABILITY

THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER

THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE

INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE

INSUREDS, SHALL NOT INCR EASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY.

C. NOTICE OF CANCELLATION

1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON

OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE

FILED WITH THE CITY OF PALO ALTO EMAILING TO
[email protected]

DocuSign Envelope ID: 679720EC-8E5C-4DCE-AA1B-888B91EAF8B5 Item 6
Attachment A - Contract
No. C23187298C with
Hinderliter, de Llamas,
and Associates (HdL)
Business Tax and Business
Registry Program Fee
Consulting Services

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: February 5, 2024
Report #:2312-2347
TITLE
SECOND READING: Adopt Ordinances Amending Planned Community Ordinance 2343 for 2901- 2905 Middlefield Road and Establishing a Separate Planned Community Zoning Designation for 702 Ellsworth Place to Enable the Development of a new Single-Story, Single-Family Residence.

CEQA Status -- Categorically Exempt Under CEQA Guidelines Sections 15061(b)(3), 15301, and 15303 (FIRST READING: December 11, 2023 PASSED 6-0-1, Veenker absent)

RECOMMENDATION
Adopt two Planned Community (PC) ordinances reflecting Council action December 11, 2023.

EXECUTIVE SUMMARY
The City Council introduced two ordinances to amend Planned Community Ordinance 2343 December 11, 2023. Consistent with direction from the City Council, staff revised the ordinances for adoption.

BACKGROUND
On December 11, 2023, the Council conducted a public hearing to introduce a pair of ordinances to amend Planned Community Ordinance 2343, relating to 2901-2905 Middlefield Road and a new single-family home proposed for 702 Ellsworth Place. The proposed amendments affecting 2901-2905 Middlefield Road addressed changes to configuration of the off-street parking spaces for the existing apartment building residents. The draft ordinance proposed a new loading and delivery space on Sutter Avenue and relocating one of the off- street parking spaces. A resident of Ellsworth Place expressed concern that delivery vehicles would not be able to access the existing residences on Ellsworth Place and presented an alternative design for a loading and delivery space on the property at 2901-2905 Middlefield.

Council accepted that alternative over the configuration contained in the draft ordinance.

The Council also discussed height limits and design criteria for a fence proposed to be constructed within the sight triangle on the 702 Ellsworth Place parcel based on pedestrian and Item 7
Item 7 Staff Report

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bicycles safety and visibility considerations at the intersection of Ellsworth Place and Middlefield Road.

City Council approved the proposed Planned Community ordinances for 702 Ellsworth Place and 2901-2905 Middlefield Road, with certain modifications. The modifications (bold text) and the corresponding revisions to the proposed ordinances are set forth below:

1. UPS approved delivery spot plan on Ellsworth that does not affect the footprint of the house, that provides a useable delivery spot for 10’ to 11’ wide trucks, maintains safe road circulation with Middlefield, does not remove public parking on Sutter, and to relocate the communications pole at a shared expense of the City and the property owner.

Staff revised Section 5(b) of the proposed ordinance for 2901-2905 Middlefield Road as follows:
(v) Property owner shall provide a 30’ x 10’ temporary loading and delivery area on Ellsworth Place adjacent to the existing apartment building. Property owner shall relocate the existing communications utility pole and guy wires and install any improvements as required by the Director of Utilities and the Director of Planning and Development Services to comply with parking design and safety standards. (vi) Property owner shall be responsible for all costs associated with fulfilling the requirements of this paragraph, provided further that the City shall cover 50% of the costs to relocate the communications utility pole and guy wires.

The exhibit to the proposed ordinance depicts the loading and delivery space in green located 4.5 feet from the wall per staff of the Palo Alto Utilities Gas Division request to keep this distance and provide bollards as a buffer between the delivery space and gas meters. The delivery space will be asphalt paving with paint markings, with signage as noted in the ordinance.

2. Require graded fencing that would allow visibility line of sight through 2 angles of the fence that allows adequate transparency of 3-foot fence.

Staff revised Section 5(a) of the proposed ordinance for 702 Ellsworth Place as follows:
(v) The sight triangle at the southeast corner of the intersection of Ellsworth Place and Middlefield Road shall extend to the southernmost corner of the property along Middlefield Road and shall not be obstructed by new impediments taller than 1 foot, except for the installation of an additional sign stating “No Delivery Trucks Over 24’ long” below or above the existing ‘No Outlet’ sign located within the Middlefield Road right of way between the sidewalk and Handa’s the 702 Ellsworth Place property line Item 7
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and a maximum 3-foot tall fence of a grated or similar design that maintains visibility through the sides of the sight triangle adjacent to Ellsworth Place and Middlefield Road.

Though ‘grated’ is the term used in the motion, the applicant does not propose a waffle- pattern; the exhibit indicates 3-foot tall wrought iron fence as Mr. Handa presented to Council on December 11. The vertical bars of the wrought iron fence will be spaced 4” on center to provide adequate visibility.

3. Direct Staff to pursue ADA tactile markers on the sidewalk where it intersects the Ellsworth Place easement subject to approval by the Director of Public Works at the City’s expense.

Staff reached out to Public Works regarding the potential placement of truncated dome surfaces on the Middlefield Road sidewalk on either side of the Ellsworth Place width.

Typically, such surfaces are used for sidewalk ramps rather than even surfaces, so this is a discussion that will continue after the Council second reading of these ordinances.

4. Width of Ellsworth Place at entrance to be 26-feet wide for at least 100-feet from Middlefield Road.

Staff revised Section 5(a) of the proposed 2901-2905 Middlefield Road as follows:
(i) A 42-inch-wide swath of asphalt paving shall be created alongside the northern edge of Ellsworth Place beginning at the Middlefield Road curb line and extending eastward approximately 100 feet approximately 37 feet to the location of an existing communications utility pole guy-wire, to increase the width of Ellsworth Place.

Staff revised section 5(a) of the proposed 702 Ellsworth Place ordinance as follows:
(ii) The development plan shall include a 2-foot, 6-inch-wide swath of asphalt pavement alongside the southern edge of Ellsworth Place beginning at the Middlefield Road curb line and extending eastward approximately 100 feet approximately 42 feet to the proposed walkway to the single-family residence, to increase the width of Ellsworth Place.

Combined, these two easements increase the width of Ellsworth Place from approximately 20 feet to approximately 26 feet. The exhibits to both proposed ordinances depict these additional easement areas.

5. Parking space #16 can be removed at the discretion of the Planning Director.

Staff revised section 5(b) of the proposed ordinance for 2901-2905 Middlefield Road as follows:

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(ii) A curbside loading zone 40 feet in length shall be designated on Sutter Avenue in front of 2901 Middlefield Road with signage and curb painting.

Property owner may remove parking space #16 at the discretion of the Director of Planning and Development Services.

FISCAL/RESOURCE IMPACT
Utilities staff provided a rough estimate of the $20,000-$25,000 for engineering and construction costs for the relocation of the communications pole, which will be split equally between the City of Palo Alto and the project applicant.

Environmental Review
Council action on this item is exempt from review under the California Environmental Quality Act (CEQA) under CEQA Guidelines section 15061(b)(3) in that it can be seen with certainty that minor changes to the parking configuration at 2901-2905 Middlefield Road and construction of a single-family home will not result in a significant impact on the environment. Council action on the PC ordinance for 2901-2905 Middlefield Road (Attachment A) is also categorically exempt under CEQA Guidelines section 15301 (minor alterations to existing facilities). Council action on the PC ordinance for 702 Ellsworth Place (Attachment B) is also categorically exempt under CEQA Guidelines section 15303 (construction of a new single-family residence).

ATTACHMENTS
Attachment A: Revised PC Ordinance for 2901 Middlefield Road with Exhibit 1 Attachment B: Revised PC Ordinance for 702 Ellsworth Place with Exhibit 1 APPROVED BY:

Jonathan Lait, Planning and Development Services Director Item 7
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Ordinance No.

Attachment A
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (the Zoning Map) to Rezone the Property at 2901- 2905 Middlefield Road from Planned Community Ordinance 2343 (PC- 2343) to Planned Community Ordinance XXXX (PC-XXXX).

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1. Findings and Declarations.
(a) On February 2, 2023, Dewey Land Company LLC (“Dewey”) and Handa Developer’s Group/RRP (“Handa”) applied to amend Planned Community Ordinance 2343 (“PC- 2343”) to apply solely to the property at 2901-2905 Middlefield Road, APN 127-35-194, (“Middlefield Parcel”) and rezone the property at 702 Ellsworth Place, APN 127-35-152, (“Ellsworth Parcel”) from Planned Community to Single Family Residential (R-1). (b) At a March 13, 2023 study session, the City Council considered the prescreening application and indicated the project applicants should proceed with a formal PC rezoning application to the Planning and Transportation Commission for a recommendation. (c) On June 28, 2023, July 12, 2023, and August 9, 2023 the Palo Alto Planning and Transportation Commission (“PTC”) held a series of public hearings to consider the application.

The PTC recommended that PC-2343 be amended to remove the Ellsworth Parcel and to adopt two new PC ordinances to govern the Middlefield Parcel and Ellsworth Parcel, respectively, along with a corresponding amendment to Section 18.08.040 of the Palo Alto Municipal Code (Zoning Map).
(d) The amendment recommended by the PTC would reduce the area of the Planned Community PC 2343 from approximately 26,386 sf to approximately 19,893 square feet to encompass 2901-2905 Middlefield Road, a 12-unit apartment building currently owned by Dewey, and amend the development plan for the PC to:
(i) restripe the tenant parking facility to assign four uncovered parking spaces to meet current code requirements for tenant parking spaces, (ii) provide a truck delivery space,
(iii) maintain trash enclosure and pickup from Sutter Avenue, (iv) the 35-foot sight triangle at the intersection of Ellsworth Place and Middlefield Road shall not be obstructed by plants, fences, or other objects taller than 1foot,
(v) add a 3’6”-wide swath of paving alongside Ellsworth Place beginning at the Middlefield Road.
(e) The PTC recommended concurrent adoption of a companion ordinance 1 0001_20240124_ca29
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Attachment A - Revised
PC Ordinance for 2901
Middlefield Road with
Exhibit 1

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(Ordinance No. XXXX) to designate the remaining approximately 6,493 square foot parcel currently owned by Handa at 702 Ellsworth as PC, for the purpose of constructing a single-story, single-family residence.
(f) The City Council held public hearings on September 18, 2023 and November 6 December 11, 2023 to consider the PTC’s recommendation and additional public input, and made further amendments to those recommendations regarding the width of Ellsworth Place, parking and loading requirements, and the sight triangle at the northeast corner of the intersection of Ellsworth Place and Middlefield Road, as set forth below. (g) The Council, after due consideration of the PTC’s recommendations, finds:
(i) The site is so situated and the uses proposed for the site are of such characteristics that the application of general districts or combining zoning districts will not provide sufficient flexibility to allow the proposed development; the City's conventional zoning district RM20 would not permit the existing 12 unit structure on the proposed 0.46 acre site (ii) Amendment to the existing Planned Community PC-2343 will provide public benefits expected to result from the Project, including expanded ingress and egress for the existing residences on Ellsworth Place through additional easements, that, when combined, would result in a 26-foot wide non- exclusive asphalt easement over a distance of approximately 100 feet extending from Middlefield Road eastward along the first 37 feet of Ellsworth Place, and the construction of an additional dwelling unit. (iii) The Council further finds that the Project provides public benefits, as described above, that are of sufficient importance to make the Project, as a whole, one with reasonable public benefit.
(iv) The existing use and improvements are generally remaining unchanged and are compatible with existing and potential uses on adjoining sites or within the general vicinity.
(v) The use permitted and the site development regulations are consistent with the following Palo Alto Comprehensive Plan policies and are, on balance, consistent with the goals and purposes of the Comprehensive Plan:

Policy L-1.1 Infill development in the urban service area should be compatible with its surroundings and the overall scale and character of the city to ensure a compact, efficient development pattern.

Policy L-1.2 Hold new development to the highest development standards in order to maintain Palo Alto’s livability and achieve the highest quality development with the least impacts.

Policy L-1.3 Ensure that new or remodeled structures are compatible with the neighborhood and adjacent structures.

Policy L-1.4 Avoid negative impacts of basement construction for single-family homes on adjacent properties, public resources, and the natural environment. 2 0001_20240124_ca29
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PC Ordinance for 2901
Middlefield Road with
Exhibit 1

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Policy L-1.5 Design buildings to complement streets and public spaces; to promote personal safety, public health and well-being; and to enhance a sense of community safety.

Policy L-1.6 Discourage the use of fences that obscure the view of the front of houses from the street. The use and improvements on the site are remaining unchanged from existing conditions, which are compatible with existing and potential uses on adjoining sites.

SECTION 2. Amendment of Zoning Map.

Section 18.08.040 of the Palo Alto Municipal Code, the "Zoning Map," is hereby amended to rezone the certain property known as 2901-2905 Middlefield Road from PC-2343 to "PC- XXXX.” The subject property and revised zoning designation is shown on the map labeled Exhibit "A1," attached hereto and incorporated herein by reference.

SECTION 3. Development Plan
Those certain plans entitled PROPOSED PC AMENDMENT TO PC 2343, DATED 1967, a copy of which is attached hereto as Exhibit “B1” and incorporated herein, are hereby approved as the Development Plan for the subject property.

SECTION 4. Uses.
(a) Permitted Uses. The permitted uses within the PC boundary shall be limited to a 12-unit apartment building: The existing apartment building shall remain on the 2901-2905 Middlefield site within the PC boundary. Covered and uncovered parking for the tenants shall be provided in accordance with Section 5(b) of this ordinance.

SECTION 5. Site Development Regulations.
(a) Compliance with Development Plan. All improvements and development shall be substantially in accordance with the Development Plan, except as modified herein and as depicted on Exhibit 1 attached hereto.
(i) A 42-inch-wide swath of asphalt paving shall be created alongside the northern edge of Ellsworth Place beginning at the Middlefield Road curb line and extending eastward approximately 100 feet approximately 37 feet to the location of an existing communications utility pole guy-wire, to increase the width of Ellsworth Place.
(ii) This additional paved area shall remain clear of obstructions. (iii) Prior to final inspection of any improvements on the site, property owner shall prepare and record an ingress and egress easement over this additional paved area to the other properties on Ellsworth Place.
(iv) Any exterior changes to the apartment building or any new construction not specifically permitted by the Development Plan or by these site development 3 0001_20240124_ca29
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PC Ordinance for 2901
Middlefield Road with
Exhibit 1

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regulations shall require an amendment to this Planned Community Zone or, if eligible, Architectural Review approval under Section 18.76 of the Palo Alto Municipal Code, as it is amended from time to time.
(vi) The 35-foot sight triangle at the intersection of Ellsworth Place and Middlefield Road shall not be obstructed by new plants, fences, or other objects taller than 1 foot.
(vii) The property owner shall maintain vegetation at a height of 1 foot or less in the planter strip between the Middlefield Road curb and sidewalk. (b) Parking and Loading Requirements.
(i) One covered parking space shall be provided for each of the 12 residential apartments. In addition, four uncovered spaces and a truck delivery space shall be provided on the 2901-2905 Middlefield property, accessible from Ellsworth Place, as shown on the Development Plan.
(ii) A curbside loading zone 40 feet in length shall be designated on Sutter Avenue in front of 2901 Middlefield Road with signage and curb painting.

Property owner may remove parking space #16 at the discretion of the Director of Planning and Development Services.
(iii) Property owner shall install a sign restricting the length of delivery vehicles on Ellsworth Place to 24’ or shorter. The sign shall be placed above or below the existing “No Outlet” sign installed in the Middlefield Road right of way, between the sidewalk and the Ellsworth Parcel.
(iv) Property owner shall restripe the existing parking facility to assign three uncovered parking spaces to meet current code requirements for tenant parking.
(v) To facilitate the provision of off-street parking space #16Property owner shall provide a 30’ x 10’ temporary loading and delivery area on Ellsworth Place adjacent to the existing apartment building. Property owner shall relocate the existing communications utility pole and guy wires and install any improvements as required by the Director of Utilities and the Director of Planning and Development Services to comply with parking design and safety standards.
(vi) Property owner shall be responsible for all costs associated with fulfilling the requirements of this paragraph, provided further that the City shall cover 50% of the costs to relocate the communications utility pole and guy wires. (vii) Prior to final inspection of any improvements on the site, property owner shall prepare and record public utilities easement for the relocated communications utility pole and guy wires.
(c) Trash Enclosures and Pickup. Trash enclosures and pickup shall be maintained with access from Sutter Avenue, and not from Ellsworth Place. (d) Development Schedule. The parking lot restriping on 2901-2905 Middlefield Road shall be immediately implemented upon the effective date of this ordinance. Off-street parking 4 0001_20240124_ca29
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PC Ordinance for 2901
Middlefield Road with
Exhibit 1

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space #16 shall be provided prior to issuance of building permits for the construction of the 702 Ellsworth Place residence. Construction of the improvements to the Middlefield Parcel shall be completed within twelve (12) months of the effective date of thisordinance. (e) Minor Variations in Project. Minor changes to the Project may be approved by the Director, according to the provisions of Palo Alto Municipal Code Section 18.76.020(b)(3)(D) for architectural review. “Minor” changes do not include changes in land use.

SECTION 6. The City Council finds that this ordinance is categorically exempt from review under the California Environmental Quality Act (CEQA) Guidelines, Section 15061(b)(3) because it can be seen with certainty that minor changes to the parking configuration at 2901- 2905 Middlefield Road and construction of a single-family home pursuant to Ordinance No. XXXX will not result in a significant impact on the environment. The City Council finds that this ordinance is additional categorically exempt under Section 15301 of the CEQA Guidelines, as it involves only minor alterations to existing facilities.

SECTION 7.
its adoption.

This ordinance shall be effective on the thirty-first day after the date of INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:
____________________________
City Clerk
____________________________
Mayor
APPROVED AS TO FORM: APPROVED:
____________________________
Chief Assistant City Attorney
____________________________
City Manager
____________________________
Director of Planning and
Development Services
5 0001_20240124_ca29
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Attachment A - Revised
PC Ordinance for 2901
Middlefield Road with
Exhibit 1

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E X H I B I T 1
HAYES GROUP ARCHITECTS, INC.
2657 SPRING STREET
REDWOOD CITY, CA 94063
P: 650.365.0600
F: 650.365.0670
www.thehayesgroup.com
PROJECT ADDRESS:
2901-2905

MIDDLEFIELD ROAD
PALO ALTO CA, 94306
3'-6" (N) NONEXCLUSIVE

INGRESS/EGRESS EASEMENT
/ASPHALT PAVING
20'-0"
(E) INGRESS/EGRESS

EASEMENT
14 15
(N)

PARKING

SPACE TYP(E)
TRASH
AREA
ISSUANCE:
16 13
(E) AC
PAVING
NO. DESCRIPTION:

PTC SUBMITTAL
DATE:
(E) 07.26.2023
8 COVERED

PARKING
SPACES
2901 CITY COUNCIL

MODIFICATIONS

PROPOSED

12.14.2023

01.10.2024702

ELLSWORTH
PLACE
(E) PC ORDINANCE
2901 2905 MIDDLEFIELD AVE
4 COVERED

PARKING
SPACES 4'-6"
LOT A
127 35 194
GAS
METERS
LOT B
127 35 152

BOLLARDS

BLDGBLDG
(N) COMMUNICATION
POLE AND GUY WIRE.
10'X30' TEMPORARY

DELIVERY AND

UNLOADING SPACE

MARKED IN PAINT
ON THE ASPHALT.

DRAWING CONTENT
2901-2905 Middlefield PC
Ordinance Site planEXISTING

LANDSCAPING
STAMPB.O. SIDEWALK

02.28.2ꢀ
MIDDLEFIELD ROAD 26'-0"
(N) DRIVEWAY APRON

PER CITY STANDARD

CABLE BOX

RELOCATED
JOB NUMBER:
2202.00
SCALE:

AS NOTED
DRAWN BY:

LB
All drawings and written materials contained
herein constitute the original & unpublished
work of the Architect and the same may not
be duplicated, used or disclosed without the
written consent of the Architect.
© Hayes Group Architects, Inc.

DRAWING NUMBER
A2.52901-2905 MIDDLEFIELD PC ORDINANCE SITE PLAN
1SCALE 3/32" = 1'-0"
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Ordinance for 2901 Middlefield Road
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ORDINANCE NO. _____
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (the Zoning Map) to Rezone the Property at 702 Ellsworth Place from Planned Community Ordinance 2343 (PC-2343) to Planned Community Ordinance XXXX (PC-XXXX).

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1. Findings and Declarations.

(a) On February 2, 2023, Dewey Land Company LLC (“Dewey”) and Handa Developer’s Group/RRP (“Handa”) applied to amend Planned Community Ordinance 2343 (“PC - 2343”) to apply solely to the property at 2901- 2905 Middlefield Road, APN 127 -35-194, (“Middlefield Parcel”) and rezone the property at 702 Ellsworth Place, APN 127 -35-152, (“Ellsworth Parcel”) from Planned Community to Single Family Residential (R-1).

(b) At a March 13, 2023 study session, the City Council considered the prescreening application and indicated the project applicants should proceed with a formal PC rezoning application to the Planning and Transportation Commission for a recommendation.

(c) On June 28, 2023, July 12, 2023, and August 9, 2023 the Palo Alto Planning and Transportation Commission (“PTC”) held a series of public hearings to consider the application.

The PTC recommended that PC-2343 be amended to remove the Ellsworth Parcel and to adopt two new PC ordinances to govern the Middlefield Parcel and Ellsworth Parcel, respectively, along with a corresponding amendment to Section 18.08.040 of the Palo Alto Municipal Code (Zoning Map).

(d) The amendment recommended by the PTC would remove the approximately 6,493 square foot parcel currently owned by Handa at 702 Ellsworth from PC -2343 and redesignate it as a separate PC, for the purpose of constructing a single -story, sin gle-family residence. The PTC recommended the following conditions:

(i) the development plan shall include a 2’6”-wide swath of pavement alongside Ellsworth Place beginning at the Middlefield Road curb line and extending to the proposed walkway to the single-family residence to increase the width of Ellsworth Place,
(ii) the 35 -foot sight triangle at the intersection of Ellsworth Place and Middlefield Road shall not be obstructed by new plants, fences, or other objects taller than 1 foot,
(iii) the 24-foot special setback from Middlefield Road shall be observed, (iv) the setback from the creek shall be determined by a slope stability analysis, (v) and a 6-foot setback shall apply to the rear property line, except with respect Item 7
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PC Ordinance for 702
Ellsworth Place with
Exhibit 1

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to a detached garage.

(e) The PTC recommended concurrent adoption of a companion ordinance (Ordinance No. XXXX) to reduce the area of the Planned Community PC -2343 from approximately 26,386 sf to approximately 19,893 square feet to encompass 2901 -2905 Middlefield Road, a 12-unit apartment building currently owned by Dewey.

(f) The City Council held public hearings on September 1 8, 2023 and November 6- December 11 , 2023 to consider the PTC’s recommendation and additional public input, and made further amendments to those recommendations regarding the width of Ellsworth Place and the sight triangle at the southeast corner of the intersection of Ellsworth Place and Middlefield Road, as set forth below.

(g) The Council, after due consideration of the PTC’s recommendations, finds:
(i) The site is so situated and the uses proposed for the site are of such characteristics that the application of general districts or combining zoning districts will not provide sufficient flexibility to allow the proposed development; the City's conventional zoning district RM20 would not permit the existing 12 unit structure on the proposed 0.46 acre site. (ii) Amendment to the existing Planned Community PC -2343 will provide public benefits expected to result from the Project, including expanded ingress and egress for the existing residences on Ellsworth Place through additional easements, that, when c ombined, would result in a 26 -foot wide non-
exclusive asphalt easement over a distance of approximately 100 feet extending from Middlefield Road eastward along the first 37 feet of Ellsworth Place, an additional 5 -foot long by 30 -inch wide easement on 702 Ellsworth Place, and the construction of an additional dwelling unit. (iii) The Council further finds that the Project provides public benefits, as described above, that are of sufficient importance to make the Project, as a whole, one with reasonable public benefit.
(iv) The proposed single -family residence is compatible with existing and potential uses on adjoining sites or within the general vicinity, which are typically single- family residences and one 12-unit apartment complex. (v) The use permitted and the site development regulations are consistent with the following Palo Alto Comprehensive Plan policies and are, on balance consistent with the goals and purposes of the Comprehensive Plan:

Policy L-1.1 Infill development in the urban service area should be compatible with its surroundings and the overall scale and character of the city to ensure a compact, efficient development pattern.

Policy L-1.2 Hold new development to the highest development standards in order to maintain Palo Alto’s livability and achieve the highest quality development with the least impacts.

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Attachment B - Revised
PC Ordinance for 702
Ellsworth Place with
Exhibit 1

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Policy L-1.3 Ensure that new or remodeled structures are compatible with the neighborhood and adjacent structures.

Policy L-1.4 Avoid negative impacts of basement construction for single-family homes on adjacent properties, public resources, and the natural environment.

Policy L-1.5 Design buildings to complement streets and public spaces; to promote personal safety, public health and well- being; and to enhance a sense of community safety.

Policy L-1.6 Discourage the use of fences that obscure the view of the front of houses from the street. The use and improvements on the site are remaining unchanged from existing conditions, which are compatible with existing and potential uses on adjoining sites.

SECTION 2. Amendment of Zoning Map.

Section 18.08.040 of the Palo Alto Municipal Code, the "Zoning Map," is hereby amended to rezone the certain property known as 702 Ellsworth Place from PC -2343 to “PC - XXXX.” The subject property and revised zoning designation is shown on the map labeled Exhibit "A
1," attached hereto and incorporated herein by reference.

SECTION 3. Development Plan

Those certain plans entitled Proposed Development Plan 702 Ellsworth, a copy of which is attached hereto as Exhibit “ B
1” and incorporated herein, are hereby approved as the
Development Plan for the subject property.

SECTION 4. Uses.

(a) Permitted Uses
. The permitted uses within the PC boundary shall be limited to a single story single- family residence with no basement.

SECTION 5. Site Development Regulations.

(a) Compliance with Development Plan
. All improvements and development sh all
be substantially in accordance with the Development Plan, except as modified herein and depicted in Exhibit 1 attached hereto.
(i) Any exterior changes to the single -family residence or any new construction not specifically permitted by the Development Plan or by these site development regulations shall require an amendment to this Planned Community Zone or, if eligible, Architectural Review approval under Section

18.76 of the Palo Alto Municipal Code, as it is amended from time to time. (ii) The development plan shall include a 2 -foot, 6 -inch-wide swath of asphalt pavement alongside the southern edge of Ellsworth Place beginning at the Middlefield Road curb line and extending eastward approximately 100 feet

approximately 42 feet to the proposed walkway to the single-family Item 7
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PC Ordinance for 702
Ellsworth Place with
Exhibit 1

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residence, to increase the width of Ellsworth Place.
(iii) This additional paved area shall remain clear of obstructions. (iv) Prior to final inspections for any structure on the site, Handa shall prepare and record an ingress and egress easement over this additional paved area to the other properties on Ellsworth Place.
(v) The sight triangle at the southeast corner of the intersection of Ellsworth Place and Middlefield Road shall extend to the southernmost corner of the property along Middlefield Road and shall not be obstructed by new impediments taller than 1 foot, except for the installation of an additional sign stating “No Delivery Trucks Over 24’ long” below or above the existing ‘No Outlet’ sign located within the Middlefield Ro ad right of way between the sidewalk and
Handa’s the 702 Ellsworth Place property line and a
maximum 3-foot tall fence of a grated or similar design that maintains visibility through the sides of the sight triangle adjacent to Ellsworth Place and Middlefield Road.
(vi) The property owner shall maintain the vegetation in the Middlefield right of way planting strip between the curb and sidewalk at a height no taller than 1 foot.
(vii) The 24-foot special setback from Middlefield Road shall be observed. (viii) The setback from the creek shall be determined by a slope stability analysis, but no less than 6 feet.
(ix) A 6-foot setback shall apply to the rear property line, except with respect to a detached garage.

(b) Logistics Plan. A logistics plan shall be submitted for City approval prior to the issuance of a building permit for the construction of the new residence at 702 Ellsworth. The logistics plan shall address construction staging, construction worker parking, and material deliveries during site preparation and construction. It shall also include best practices for dust mitigation, stipulate permitted construction activities, hours and noise requirements, and include contact information for construction-related complaints. The property owner shall provide a $5,000 deposit to offset City’s enforcement costs reasonably incurred in responding to construction- related complaints that may arise from this project. If the deposit account balance falls to $1,000 or lower, the deposit account balance shall be replenished to $5,000.

Any funds remaining in the deposit account shall be refunded to property owner upon issuance of the certificate of occupancy for the residence.

(c) Development Schedule
. Construction of the improvements to Ellsworth Pla ce
shall be completed within twelve (12) months of the effective date of this ordinance.

Construction of other improvements shall be completed within twenty -four (24) months of the effective date of this ordinance.

(d) Minor Variations in Project
. Minor changes to the Project may be approved by
the Director, according to the provisions of Palo Alto Municipal Code Section 18.76.020(b)(3)(D) for architectural review. “Minor” changes do not include changes in land use.

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Attachment B - Revised
PC Ordinance for 702
Ellsworth Place with
Exhibit 1

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SECTION 6 . The City Council finds that this ordinance is categorically exempt from review under the California Environmental Quality Act (CEQA) Guidelines, Section 15061(b)(3) because it can be seen with certainty that construction of a single -family home pursuant to will not result in a significant impact on the environment. The City Council finds that this ordinance is additionally categorically exempt under Section 15303 of the CEQA Guidelines, as it approves construction of a new single-family residence.

SECTION 7. This o rdinance shall be effective on the thirty -first day after the date of its adoption.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Chief Assistant City Attorney City Manager

____________________________
Director of Planning and
Development Services

Item 7
Attachment B - Revised
PC Ordinance for 702
Ellsworth Place with
Exhibit 1

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02.28.25 A2.6
HAYES GROUP ARCHITECTS, INC.
2657 SPRING STREET
REDWOOD CITY, CA 94063
P: 650.365.0600
F: 650.365.0670
www.thehayesgroup.com

DRAWING CONTENT

DRAWING NUMBER
All drawings and written materials contained
herein constitute the original & unpublished
work of the Architect and the same may not
be duplicated, used or disclosed without the
written consent of the Architect.
© Hayes Group Architects, Inc.

DRAWN BY:

SCALE:

JOB NUMBER:

STAMP
ISSUANCE:

PROJECT ADDRESS:
702 Ellsworth PC
Ordinance Site plan

AS NOTED
2202.00
LB
Date: 1/8/24
File Name: Ellsworth House_BIM_ARCH
NO. DESCRIPTION: DATE:

PTC SUBMITTAL 07.26.2023
2901 CITY COUNCIL

MODIFICATIONS

12.14.2023

PROPOSED
PC ORDINANCE 01.08.2023
PP
N49°20'00"E 86.08'
N52°00'00"W 130.67'
S47°12'00"W 101.30'
S52°00'00"E 117.11'(T)

80.67' 50.00'

44.50'
2'-6" (N) NONEXCLUSIVE

INGRESS/EGRESS EASEMENT
/ASPHALT PAVING
26'-0"
(N) DRIVEWAY APRON

PER CITY STANDARD
10'-0"
4'-0"
FROM B.O.

SIDEWALK
4'-0"RETURN
LOT A
127-35-194
LOT B
127-35-152
702 ELLSWORTH

FRONT YARD
(E)
4 COVERED

PARKING
SPACES
(E)
8 COVERED

PARKING
SPACES
13 14 15

MATADERO CANAL
BLDG.

BLDG.

BLDG.
(E)
TRASH
AREA
TANDEM
(N)

PARKING
SPACE TYP.
(E) AC
PAVING

EXISTING

LANDSCAPING
B.O. SIDEWALK
(E) FIRE

HYDRANT
2901-2905 MIDDLEFIELD AVE.

LOT B
127-35-152
702

ELLSWORTH
PLACE
N52°00'00"W 229.20'(T) 50.00'78.28' 44.50'
S38°00'00"W 109.87' S38°00'00"W 109.87'
100.00'

56.42'

72.61'
20'-0"
(E) INGRESS/EGRESS

EASEMENT
6'-0" FROM
B.O. SIDEWALK

SUTTER AVENUE

MIDDLEFIELD ROAD

ELLSWORTH PLACE
3' TALL FENCE WITH

VERTICAL WROUGHT
IRON BARS.

PROPERTY LINE

TYPICAL

STANDARD CITY
REQUIRED 35' SITE
TRIANGLE TYP.

SCALE 3/32" = 1'-0"
702 ELLSWORTH PC ORDINANCE SITE PLAN
1 702 ELLSWORTH PLACE
PALO ALTO CA 94306
N
S38°00'00"W 100.00'
EXHIBIT 1
Item 7
Attachment B - Revised PC
Ordinance for 702 Ellsworth Place
with Exhibit 1

Item 7: Staff Report
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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: February 5, 2024
Report #:2401-2538
TITLE
SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Chapter 8.04 (Street, Trees, Shrubs, and Plants) and Chapter 8.10 (Tree Preservation and Management Regulations) (FIRST READING: January 16, 2024 PASSED 5-2, Lythcott-Haims, Tanaka no)

BACKGROUND
This was heard by the City Council on January 16, 202 for a first reading and was approved 5-2, Lythcott-Haims, Tanaka no.

The ordinance has been amended to reflect part B of the Council’s motion. Specifically, a provision was added to Section 8.10.070 to require requests to prune trees in excess of the limits in Section 8.10.020(i) to be submitted to the urban forester fourteen days before pruning the tree with a statement explaining why pruning beyond the limits is warranted.

ATTACHMENTS
Attachment A: Ordinance of the Council of the City of Palo Alto Amending Chapter 8.04 (Street, Trees, Shrubs, and Plants) and Chapter 8.10 (Tree Preservation and Management Regulations).

APPROVED BY:

Mahealani Ah Yun, City Clerk
Item 8
Item 8 Staff Report

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*NOT YET APPROVED* Attachment A
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Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Chapter 8.04 (Street, Trees, Shrubs, and Plants) and Chapter 8.10 (Tree Preservation and Management Regulations).

The Council of the City of Palo Alto ORDAINS as follows:

SECTION 1. Chapter 8.04 (Street Trees, Shrubs, and Plants) of Title 8 (Trees and Vegetation) of the Palo Alto Municipal Code is hereby amended to read as follows (additions underlined and deletions struck through):

Chapter 8.04

PUBLIC TREES, SHRUBS, HEDGES, AND PLANTS
Sections:

8.04.005 Purpose.

8.04.010 Definitions.

8.04.015 Authority of city.

8.04.020 Permit required for certain work.

8.04.030 Application for permit.

8.04.040 Issuance of permit.

8.04.050 Public nuisances.

8.04.070 Enforcement.

8.04.080 Interference with enforcement.

8.04.090 Adoption of regulations.

8.04.005 Purpose.

The purpose of this chapter is to protect and promote trees, shrubs, hedges, and plants located on public property within the city. In establishing these procedures and standards, the city recognizes that trees, shrubs, hedges, and plants are an essential part of the city's infrastructure, with benefits that include promoting the health, safety, welfare, and quality of life of the residents of the city; addressing climate change by sequestering carbon and providing a cooling effect; reducing air, water, and noise pollution; preventing soil erosion and Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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stormwater runoff; providing wildlife habitat; and enhancing the aesthetic environment. It is the city's intent to encourage the preservation of trees, shrubs, hedges, and plants.

8.04.010 Definitions.

For the purposes of this title, the following words shall have the meaning ascribed to them in this section:
(a) "Person" means individuals, firms, associations and corporations, and agents, employees or representatives thereof.
(b) "City" means the city of Palo Alto acting by and through its authorized representatives. (c) "Street" means and includes all land lying between the boundaries of property abutting on all public streets, boulevards, alleys, and walks.
(d) "Parks" means and includes all parks to which names have been given by action of the city council.
(e) "Public places" means and includes all grounds, other than streets or parks, owned by, leased to, or under the control of the city of Palo Alto. (f) "Tree" means and includes any woody perennial plant generally having a single main stem and commonly achieving ten feet in height.
(g) "Shrub" means and includes any woody perennial plant generally having multiple stems and commonly less than ten feet in height.
(h) "Hedge" means and includes any tree, shrub, or plant, when planted in a dense, continuous line or area, as to form a thicket or barrier. (i) "Plant" means and includes all vegetation other than trees and shrubs. (j) "Public trees, shrubs, hedges, and plants" means and includes any tree, shrub, hedge, or plant in any street, park, or public place in the city of Palo Alto. (k) "Urban forester" means public works department staff including the urban forester or their designee.
(l) "Tree permit" means a permit issued by the urban forester for one or more of the following purposes:
(1) To permit removal of a public tree.
(2) To permit public tree care, work, or treatment.
(3) To permit removal of a protected tree under 8.10.050. (4) To establish a tree preservation bond.
(5) For payment of "in-lieu" fees for required mitigation measures.

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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8.04.015 Authority of city.

The city of Palo Alto shall have control of all public trees, shrubs, hedges, and plants now or hereafter in any street, park or public place within the city limits, and shall have the authority to plant, care for, remove, replace, and maintain such trees, shrubs, hedges, and plants.

8.04.020 Permit required for certain work.

Unless authorized by a tree permit or other city approval, no person shall do any of the following:
(a) Plant, prune, trim, shape, remove, top, or in any way damage, destroy, injure or mutilate a public tree, shrub, hedge, or plant. A tree permit is not required for a property owner, resident, or their agent to maintain shrubs, hedges, or plants located within the city right-of- way associated with their property.
(b) Fasten a sign, wire, or injurious material to any public tree, shrub, hedge, or plant. (c) Excavate any ditch or tunnel; or place concrete or other pavement within a distance of ten feet of the center of the trunk of any public tree.

8.04.030 Application for permit.

Any person desiring to do any of the work described in Section 8.04.020 may apply for a tree permit so to do. The applicant shall state the nature of the work and the location where it will be done.

8.04.040 Issuance of permit.

A tree permit shall be issued authorizing work that meets all the following conditions:
(a) Will not create, continue, or aggravate any hazardous condition, or public nuisance. (b) Will not prevent or interfere with the growth, location or planting of any approved public tree.
(c) Is consistent with the planting plan being followed by the city.

8.04.050 Public nuisances*.

Any of the following are, for the purposes hereof, defined to be public nuisances:
(a) Any dead, diseased, infested, or dying tree, shrub, hedge, or plant in any street or on any public or private property so near to any public tree, shrub, hedge, or plant as to constitute a danger to a public tree, shrub, hedge, or plant, or street, or portion thereof or public property. (b) Any tree, shrub, hedge, or plant on any private property or in any street, of a type or species that will destroy, impair, or otherwise interfere with any street improvement, sidewalk, curb, approved public tree, gutter, sewer, other public improvement, including utility mains and services, or a public tree, shrub, hedge, or plant.

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(c) Any tree limb, shrub, hedge, or plant reaching a height more than three feet above the curb grade adjacent thereto, except a tree trunk having no limbs lower than nine feet above curb grade, within the thirty-five foot triangle of public or private property, measured from the projected curb lines, at the intersections of any street improved for vehicular traffic where either traffic signals, stop signs, or yield signs are not installed, or at any intersections which are determined by the chief transportation official to contain a tree limb, shrub, hedge, or plant that obscures or impairs the view of a passing motorist, cyclist or pedestrian so as to create a safety hazard.
(d) Vines or climbing plants growing into or over any public tree, shrub, hedge, or plant; or any public hydrant, pole or electrolier.
(e) Existence of any tree within the city limits that is infested or infected with objectionable insects, scale, fungus, or growths that are included in the California Department of Food and Agriculture’s detection and eradication programs or that are growth injurious to trees. (f) The existence of any branches or foliage which interfere with visibility on, free use of, access to, or obstruct public vehicular or pedestrian travel on any portion of any street improved for vehicular or pedestrian travel.
(g) Hedges or dense, thorny shrubs and plants on any street or part thereof. (h) Shrubs and plants more than two feet in height in any tree well or planting strip between the sidewalk and curb, measured above top of curb grade. (i) Any tree, shrub, hedge, or plant declared a public nuisance pursuant to state law and ordered removed by a court of competent jurisdiction.
* Abatement procedure - See Chapter 9.56 of this code.

8.04.070 Enforcement.
(a) Violation of any provision of this chapter is a misdemeanor, punishable as provided in this code. Each day of violation constitutes a separate offense and may be separately punished. (b) Persons employed in the following designated employee positions are authorized to exercise the authority provided in California Penal Code Section 836.5 and are authorized to issue citations for violations of this chapter, including but not limited to leveling fines under the city's administrative penalty authority: assistant director of public works public services division, urban forester, project manager in the urban forestry section, landscape architect, and code enforcement officer.
(c) Any person who damages a public tree, through any act or omission, whenever such act or omission is prohibited by or not authorized pursuant to this chapter, may be liable civilly in a sum not to exceed ten thousand dollars per tree, or the reproduction cost of each such tree, whichever amount is higher.

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(d) Injunctive relief. A civil action may be commenced to abate, enjoin, or otherwise compel the cessation of such violation.
(e) Costs. In any civil action brought pursuant to this chapter in which the city prevails, the court shall award to the city all costs of investigation and preparation for trial, the costs of trial, reasonable expenses including overhead and administrative costs incurred in prosecuting the action, and reasonable attorney fees.
(f) The remedies and penalties provided in this section are cumulative and not exclusive.

8.04.080 Interference with enforcement.

No person shall interfere with or delay the authorized representatives of the city from the execution and enforcement of this chapter, except as provided by law.

8.04.090 Adoption of regulations.

The city may adopt regulations prescribing standards of landscaping and planting of streets, parks and public places, therein. A copy of such regulations shall be available for public inspection upon request, and all work performed in streets, parks or public places shall be performed in accordance therewith.

SECTION 2
. Chapter 8.10 (Tree and Landscape Preservation Management) of Title 8 (Trees and Vegetation) of the Palo Alto Municipal Code is hereby amended to read as follows (additions
underlined and deletions struck through):

Chapter 8.10
TREE AND LANDSCAPE PRESERVATION AND MANAGEMENT*
Sections:

8.10.010 Purpose.

8.10.020 Definitions.

8.10.030 Tree and Landscape Technical Manual.

8.10.040 Disclosure of information regarding existing trees.

8.10.050 Removal of protected trees.

8.10.055 Tree replacement.

8.10.060 No limitation of authority under Titles 16 and 18.

8.10.070 Care of protected trees.

8.10.080 Development conditions.

8.10.090 Designation of heritage trees.

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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8.10.092 Tree removal in wildland- urban interface area.

8.10.095 Tree removal in Hospital District Zone.

8.10.100 Enforcement.

8.10.110 Remedies for violation.

8.10.120 Fees.

8.10.130 Severability.

8.10.140 Applications, notice, and appeals.

8.10.010 Purpose.

The purpose of this chapter is to protect specified trees located on private property within the city, and establish standards for removal, maintenance, and planting of trees and landscaping.

In establishing these procedures and standards, the city recognizes that trees and landscaping are an essential part of the city's infrastructure. Their benefits include promoting the health, safety, welfare, and quality of life of the residents of the city; addressing climate change by sequestering carbon and providing a cooling effect; reducing air, water, and noise pollution; preventing soil erosion and stormwater runoff; providing wildlife habitat; and enhancing the aesthetic environment. It is the city's intent to encourage both the preservation of trees and the proactive incorporation of trees and their benefits within development.

8.10.020 Definitions.

For the purposes of this chapter, terms defined in Chapter 8.04 shall have the same meanings in this chapter, and the following terms shall have the meaning ascribed to them in this section:
(a) "Basal flare" means that portion of a tree where there is a rapid increase in diameter at the confluence of the root crowntrunk and trunkrootcrown. (b) "Buildable area" means that area of a parcel:
(1) Upon which, under applicable zoning regulations, a structure may be built without a variance, design enhancement exception, or home improvement exception; or (2) Necessary for construction of primary access to structures located on or to be constructed on the parcel, where there exists no feasible means of access which would avoid protected trees. On single-family residential parcels, the portion of the parcel deemed to be the buildable area for primary access shall not exceed ten feet in width. (c) "Building footprint" means the two-dimensional configuration of a building's perimeter boundaries as measured on a horizontal plane at ground level.

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(d) "Designated arborist" means an arborist certified by the International Society of Arboriculture or another nationally recognized tree research, care, and preservation organization, selected by the urban forester for inclusion in a list of approved arborists to be:
hired by:
(1) Hired by anAn applicant at their own expense, or
(2) Chosen by theThe city at an applicant's expense, if a project includes a public hearing. (e) "Development" means any work upon any property in the city which requires a subdivision, planned community zone, variance, use permit, building permit, demolition permit, or other city approval or which involves excavation, landscaping or construction within the tree protection zonedripline area of a protected tree or is subject to requirements of the California Model Water Efficient Landscape Ordinance (MWELO).
(f) "Director of planning and development services" means the director of planning and development services or their designee.
(g) "Director of public works" means the director of public works or their designee. (h) "Discretionary development approval" means planned community zone, subdivision, use permit, variance, home improvement exception, design enhancement exception, architectural review board approval, or any proposal or application that requires the discretion of the authorizing person or entity.
(i) "Dripline area" means the area defined by the projection to the ground of the outer edge of the canopy or a circle with a radius ten times the diameter of the trunk as measured four and one-half feet (fifty-four inches) above natural grade, whichever is greater. (j) "Excessive pruning" of a protected tree means any of the following:
(1) Removal of more than twenty-five percentone-fourth of the functioning leaf, stem, or root area of a tree in any twenty-four-month period.
(2) Removal of more than fifteen percent of the functioning root area of any Quercus (oak) species in any thirty-six-month period.
(3) Any removal of the functioning leaf, stem, or root area of a tree so as to cause a significant decline in health, increased risk of failure, or the unbalancing of a tree. (jk) "Hazardous" means an imminent hazard which constitutes a high or extreme threat to the safety of persons or property as defined by American National Standards Institute A300, Part 9.
(kl) "Protected" tree means any of the following:
(1) Any locally native tree of the species Acer macrophyllum (Bigleaf Maple), Calocedrus decurrens (California Incense Cedar), Quercus agrifolia (Coast Live Oak), Quercus douglasii (Blue Oak), Quercus kelloggii (California Black Oak), or Quercus lobata (Valley Oak) which is eleven Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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and one-half inches in diameter (thirty-six inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. (2) Any Coast Redwood tree (species Sequoia sempervirens) that is eighteen inches in diameter (fifty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade.
(3) Any tree, other larger than a Coast Redwood Tree, fifteen inches in diameter (forty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade of any species except those invasive species described as weeds in Section

8.08.010 and those species classified as high water users by the Water Use Classificationwater use classification of Landscape Speciesthe landscape species list (WUCOLS) approved by the California Department of Water Resources.
(4) Any tree designated for protection during review and approval (with the exception of a current or previously completed development project. On parcels zoned other than single- family (R-1) or low density (RE, R-2, or RMD) residential, species exempted under subsection (3) of this Section may be designated as a protected tree.Coast Redwood). (4) Any tree designated for protection during review and approval of a development project. (5) Any tree designated for carbon sequestration and storage and/or environmental mitigation purposes as identified in an agreement between the property owner and a responsible government agency or recorded as a deed restriction. (6) Any heritage tree designated by the city council in accordance with the provisions of this chapter.
(7) Any replacement mitigation tree or other tree designated to be planted due to the conditions listed in Section 8.10.055.
(lm) "Protected tree removal permit" means a permit issued to allow a person to remove a protected tree.
(m) “Right tree in the right place principles” means the set of principles that determine if a tree is located in an appropriate location for its specific species requirements and characteristics, in accordance with the factors listed in the Tree and Landscape Technical Manual.
(n) "Remove" or "removal" means:
(1) Complete removal, such as cutting to the ground or extraction, of a tree; or (2) Taking any action foreseeably leading to the death of a tree or permanent damage to its health; including but not limited to excessive pruning, cutting, topping, girdling, poisoning, overwatering, underwatering, unauthorized relocation or transportation of a tree, or trenching, excavating, altering the grade, or paving within the tree protection zonedripline area of a tree.

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(o) “Retrenchment” means the process in which trees may reconfigure as they age and deteriorate, often continuing to grow in trunk diameter while branches die and fail. (p) "Tree Protection Zone" means the area defined by a circle with a radius ten times the diameter of the trunk when measured four and one-half feet (fifty-four inches) above natural grade.
(q) "Tree Reportreport" means a report prepared by a designated arborist. (rp) "Tree and Landscape Technical Manual" means the regulations issued by the city manager to implement this chapter.

8.10.030 Tree and Landscape Technical Manual.

The city manager, through the urban forestry section, and public works and planning and development services departments, shall issue regulations necessary for implementation and enforcement of this chapter, which shall be known as the Tree and Landscape Technical Manual. In the event of a conflict between the provisions of this Title 8 and the Tree and Landscape Technical Manual, this Title 8 shall prevail. The Tree and Landscape Technical Manual will be made readily available to the public and shall include, but need not be limited to, standards and specifications regarding the following:
(a) Protection of trees during construction.
(b) Replacement of trees allowed to be removed pursuant to this chapter where such replacements:
(1) Prioritize the use of locally native species, as listed in Section 8.10.020(l)(1), consistent with Urban Forest Master Plan Goal 2: "Re-generated native woodland and riparian landscapes as the key ecological basis of the urban forest with focus on native species and habitat;" (2) Include climate adaptive, drought tolerant, non-native species as needed to satisfy right tree in the right place principles; and
(3) Incorporate a secondary goal of net tree canopy increase on the property within fifteen years.
(c) Maintenance of protected trees (including but not limited to pruning, irrigation, and protection from disease).
(d) The format and content of tree reports required to be submitted to the city pursuant to this chapter.
(e) The criteria for determining whether a tree is hazardous within the meaning of this chapter.
(f) Landscape design, irrigation, and installation standards consistent with the city's water efficient landscape regulations.

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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8.10.040 Disclosure of information regarding existing trees. (a) Any application for development or demolition shall be accompanied by a statement by a designated arborist which discloses whether any protected trees exist on the property which is the subject of the application, and describing each such tree, its species, size, tree protection zonedripline area, and location. This requirement shall be met by including the information on plans submitted in connection with the application.
(1) Notwithstanding subsection (a), applications involving only the development of an Accessory Dwelling Unit that conforms to Section 18.09.030, Table 1, require only a statement disclosing whether any protected trees are located on the property which is the subject of the application. This statement may be completed by the applicant. (b) In addition, the location and species of anyall other tree which is four inches in diameter (e.g., thirteen inches in circumference) or more when measured four and one-half feet (fifty- four inches) above natural grade shall be shown on the plans if the tree is:
(1) On the property or trees on the property and in the adjacent public right-of-way, and is which are within thirty feet of the building footprint proposed for development, or (2) Locatedand trees located on adjacent property within thirty feet of the proposed building footprint, or
(1)(3) Close enough that its canopy overhangswith canopies overhanging the project site, shall be shown on the plans, identified by species.
(c) The director of public works or urban forester may require submittal of such other information as is necessary to further the purposes of this chapter including but not limited to photographs.
(d) Disclosure of information regarding private protected trees pursuant to this section shall not be required when the development for which the approval or permit is sought does not involve any change in an existing building footprint nor any grading, trenching, paving, or any change in landscaping which could alter water availability to established plants, hedges, shrubs, or trees.
(e) The urban forester or the designated arborist for a project shall add identified protected trees into the city's tree inventory database, and in coordination with the planning and development services departments, into city parcel reports. (f) Knowingly or negligently providing false or misleading information in response to this disclosure requirement shall constitute a violation of this chapter.

8.10.050 Removal of protected trees.

It shall be a violation of this chapter for anyone to remove or cause to be removed a protected tree, except pursuant to a protected tree removal permit issued under Section

8.10.140 consistent with the following:

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(a) In the absence of proposed development:
(1) A protected tree shall not be removed unless the urban forester grants a protected tree removal permit, or on parcels zoned other than single-family (R-1) or low density residential (RE, R-2, or RMD), the director of planning and development services authorizes the removal through staff level architectural review pursuant to Section 18.76.020(b)(3), having determined, on the basis of a tree report prepared by a designated arborist and other relevant information, that treatments or corrective practices are not feasible, and that the tree should be removed because any of the following apply:
(i) It is dead, is hazardous, or constitutes a public nuisance under Section 8.04.050 of this code.
(ii) It is a detriment to or is crowding an adjacent protected tree. , or is impacting the foundation or eaves of a residence or any covered parking required under Title 18. (iii) It is at risk for retrenchment or other tree decline coping processes or does not conform with right tree in the right place principles.
(iv) It is impacting the foundation or eaves of a residence, or any covered parking required under Title 18 of this code.
(2) In the event a protected tree is removed pursuant to a protected tree removal permit granted under this subsection (a), a temporary moratorium on development of the subject property may be issued by the urban forester for up to twenty-four months or by, the director of planning and development services, in consultation with the urban forester, for up tomay issue a temporary moratorium on development of the subject property not to exceed thirty-six months, from the date the tree removal occurred. Completion of requiredFor any moratorium less than thirty-six months, the urban forester shall determine appropriate mitigation measures included infor the tree removal permit does not remove or shorten any such moratorium. A moratorium may be terminated early with approval of the urban forester or director of planning, and development services, as applicable, and may require additional mitigationensure measures. are incorporated into any future development approvals for the property. Mitigation measures included in the protected tree removal permit and any additional mitigation measures required to shorten a moratoriumas determined by the urban forester shall be imposed as a condition of any subsequent permits for development on the subject property. (b) In the case of any development on a single-family (R-1) or low density (RE, R-2, or RMD) residential zoned parcel, other than in connection with a subdivision, a protected tree shall not be removed unless determined by the urban forester, on the basis of a tree report prepared by a designated arborist and other relevant information, that any of the following apply:
(1) The tree is so close to the proposed development that construction would result in the death of the tree, and there is no financially feasible design alternative that would permit preservation of the tree, where financially feasible means an alternative that preserves the tree unless retaining the tree would increase project cost by more than twice the reproduction cost of the tree or ten percent of the given project valuation, whichever is greater.

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(2) Retention of one or more trees would result in reduction of the otherwise-permissible buildable area of the lot by more than twenty-five percent, and there is no financially feasible design alternative that would allow for preservation of the tree(s). For the purposes of this subsection (a)(2), a financially feasible design alternative means a design alternative that preserves the tree(s) and would not increase the project cost by more than twice the reproduction cost of the tree(s) or ten percent of the given project valuation, whichever is greater. All tree protection zones impacting buildable area are included in the reduction of buildable area calculation. (1)(3) The tree could be removed due to the conditions listed in Section 8.10.050(a)(1)(i), (ii) or (iii) (2) The tree could be removed due to the conditions listed in Section 8.10.050(a)(1) and treatments or corrective practices are not feasible. (c) In the case of development involving a proposed subdivision of land into two or more parcels, a protected tree shall not be removed unless determined by the urban forester, on the basis of a tree report prepared by a designated arborist and other relevant information, that either of the following apply:
(1) Removal is unavoidable due to restricted access to the property or deemed necessary to repair a geologic hazard (landslide, repairs, etc.), in which case only the protected tree or trees necessary to allow access to the property or repair the geologic hazard may be removed. (2) The tree could be removed due to the conditions listed in subsection (a)(1)(i), (ii), or (iii) and treatments or corrective practices are not feasible. (d) In the case of development requiring planning approval under Title 18, and not included under subsections (b) or (c), a protected tree shall not be removed unless determined by the urban forester, on the basis of a tree report prepared by a designated arborist and other relevant information, that anyeither of the following apply:
(1) Retention of one or more treesthe tree would result in reduction of the otherwise- permissible buildable area of the lot by more than twenty-five percent, and there is no financially feasible design alternative that would permit preservation of the tree(s),, where financially feasible means an alternative that preserves the tree(s) unless retaining the tree(s) would increase project cost by more than twice the reproduction cost of the tree or ten percent of the given project valuation, whichever is greater. All tree protection zones impacting buildable area are included in the reduction of buildable area calculation. (2) The tree should be removed because it is dead, hazardous, or constitutes a public nuisance under Section 8.04.050. In such cases, the tree protection zonedripline area of the removed tree, or an equivalent area on the site, shall be preserved for mitigation purposes from development of any structure.
(3) Discretionary development review determines that the final project follows right tree in the right place principles and would result in a net tree canopy increase on the property within fifteen years, and replacement of trees, shrubs, and plants either:

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(i) Is consistent with Urban Forest Master Plan Goal 2: "Re-generated native woodland and riparian landscapes as the key ecological basis of the urban forest with focus on native species and habitat," or
(ii) Uses climate adaptive, drought tolerant species.
(e) In any circumstance other than those described in subsections (a), (b), (c), or (d), a protected tree shall not be removed unless determined by the urban forester, on the basis of a tree report prepared by a designated arborist and other relevant information, that the tree is dead, is hazardous, or constitutes a public nuisance under Section 8.04.050.

8.10.055 Tree replacement.
(a) In the event a protected tree is removed pursuant to Section 8.10.050(a)(1)(i), mitigation for the removed tree, replacement tree ratio, in lieu fees, or a combination thereof shall be determined by the urban forester, based on factors including but not limited to the species, size, location, and specific reason for removal of the protected tree, in accordance with the standards and specifications in the Tree and Landscape Technical Manual. (b) In the event a protected tree is removed pursuant to Section 8.10.050(a)(1)(ii), (iii) or (iv), (b), (c), (d), or (e), the tree removed shall be replaced in accordance with the standards and specifications in the Tree and Landscape Technical Manual, including but not limited to prioritization of locally native species, satisfaction of right tree in the right place principles, and incorporation of a secondary goal of net tree canopy increase on the property within fifteen years. The urban forester shall approve the number, species, size, and location of replacement trees.

8.10.060 No limitation of authority under Titles 16 and 18.

Nothing in this chapter limits or modifies the existing authority of the city under Title 18 to require trees, shrubs, hedges, and other plants not covered by this chapter to be identified, retained, protected, and/or planted as conditions of the approval of development. In the event of conflict between provisions of this chapter and conditions of any permit or other approval granted pursuant to Title 16 or Title 18, the more protective requirements shall prevail.

8.10.070 Care of protected trees.
(a) All owners of property containing protected trees shall follow the maintenance standards in the Tree and Landscape Technical Manual, including avoiding any action foreseeably leading to the death of a tree or permanent damage to its health; including but not limited to excessive pruning, cutting, topping, girdling, poisoning, overwatering, underwatering, unauthorized relocation or transportation of a tree, or trenching, excavating, altering the grade, or paving within the tree protection zonedripline area of a tree. (b) At least seven days prior to pruning a protected tree, other than that required to remove a dead, diseased, or broken branch or branches, the property owner or their designee shall prominently post a notice on the property, in one or more locations readily visible to the public, that includes standards for pruning and a description of the tree including tree species, size, Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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location, the date of work, and a contact phone number. The form for such notice will be available on the city's website as a printable document. Protected trees less than five years old are exempt from this provision.
(c) Any requests to exceed the limits for pruning set forth in Section 8.10.020(i) shall be submitted to the urban forester by the property owner or their designee at least fourteen days prior to pruning a protected tree. Each request shall be accompanied by a statement explaining why exceedance of the limits is warranted. No pruning that exceeds the limits set forth in Section 8.10.020(i) shall take place without the approval of the urban forester. (cd) The standards for protection of trees during construction contained in the Tree and Landscape Technical Manual shall be followed during any development on property containing trees.
(de) The urban forester shall add identified protected trees into the city's tree inventory database and, in coordination with the planning and development services departments, into city parcel reports.

8.10.080 Development conditions.
(a) Development approvals for property containing protected public trees shall include appropriate conditions as set forth in the Tree and Landscape Technical Manual, providing for the protection of such trees during construction and for maintenance of such trees thereafter.

Trees may be designated for protection that are significant visually or historically, provide screening, or are healthy and important to the nearby ecosystem. (b) It shall be a violation of this chapter for any property owner or agent of the owner to fail to comply with any development approval or building permit condition concerning preservation, protection, and maintenance of any tree, including but not limited to protected trees.

8.10.090 Designation of heritage trees.
(a) Upon nomination by any person and with the written consent of the property owner(s), the city council may designate a tree or trees as a heritage tree. (b) A tree may be designated as a heritage tree upon a finding that it is of importance to the community due to any of the following factors:
(1) It is an outstanding specimen of a desirable species. (2) It is one of the largest or oldest trees in Palo Alto. (3) It possesses distinctive form, size, age, location, and/or historical significance. (c) After council approval of a heritage tree designation, the city clerk shall notify the property owner(s) in writing. A listing of trees so designated, including the specific locations thereof, shall be kept by the departments of public works.

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(d) Once designated, a heritage tree shall be considered protected and subject to the provisions of this chapter unless removed from the list of heritage trees by action of the city council. The city council may remove a tree from the list upon its own motion or upon written request by the property owner. Request for such action must originate in the same manner as nomination for heritage tree designation.

8.10.092 Tree removal in wildland-urban interface area.

Tree removal and relocation in the wildland-urban interface (WUI) area, as defined in Section

15.04.190, shall be subject to the provisions in Chapter 15.04. To the extent Chapter 15.04 is inconsistent with this chapter, Chapter 15.04 shall control.

8.10.095 Tree removal in Hospital District Zone.

Tree removal and relocation in the Hospital District (HD) shall be subject to the provisions in Section 18.36.070. To the extent Section 18.36.070 is inconsistent with this chapter, Section

18.36.070 shall control.

8.10.100 Enforcement.
(a) Violation of this chapter is a misdemeanor, punishable as provided in this code. Each day of violation constitutes a separate offense and may be separately punished. (b) Persons employed in the following designated employee positions are authorized to exercise the authority provided in California Penal Code Section 836.5 and are authorized to issue citations for violations of this chapter, including but not limited to leveling fines under the city's administrative penalty authority: assistant director of public works public services division, urban forester, project manager in the urban forestry section, landscape architect, and code enforcement officer.

8.10.110 Remedies for violation.

In addition to all other remedies set forth in this code or otherwise provided by law, the following remedies shall be available to the city for violation of this chapter:
(a) Stop Work - Temporary Moratorium.
(1) If a violation occurs in the absence of proposed development pursuant to Section

8.10.050(a)(1), or while an application for a building permit or discretionary development approval for the lot upon which the tree is located is pending, the director of planning and development services in consultation with the urban forester shall issue a temporary moratorium on development of the subject property, not to exceed five years from the date the violation occurred. The purpose of the moratorium is to provide the city an opportunity to study and determine appropriate mitigation measures for the tree removal, and to ensure measures are incorporated into any future development approvals for the property. Mitigation measures as determined by the urban forester shall be imposed as a condition of any subsequent permits for development on the subject property.

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(2) If a violation occurs during development pursuant to Section 8.10.050(b), (c), (d), or (e), the city shall issue a stop work order suspending and prohibiting further activity on the property pursuant to the grading, demolition, and/or building permit(s) (including construction, inspection, and issuance of certificates of occupancy) until a mitigation plan has been filed with and approved by the director of planning and development services in consultation with the urban forester, agreed to in writing by the property owner(s), and either implemented or guaranteed by the posting of adequate security. The mitigation plan shall include measures for protection or repair of any remaining trees on the property, and shall provide for replacement of each tree removed on the property or at locations approved by the urban forester. The replacement ratio shall be in accordance with the standards set forth in the Tree and Landscape Technical Manual, and shall be at least twice the prescribed ratio required where tree removal is permitted pursuant to the provisions of this chapter. (b) Civil penalties.
(1) As part of a civil action brought by the city, a court may assess against any person who commits, allows, or maintains a violation of any provision of this chapter a civil penalty in the following amount:
(i) Ten thousand dollars per tree, or twice the reproduction cost of each tree, whichever amount is higher, for the complete removal of a tree, as defined in Section 8.10.020(n)(1). (ii) Ten thousand dollars per tree, or the reproduction cost of each tree, whichever amount is higher, for any of the actions set forth in Section 8.10.020(n)(2). (iii) Ten thousand dollars per tree, or twice the repair cost of each tree, whichever amount is higher, for damage to a tree protected or regulated by this chapter which can be rehabilitated. (2) Penalties shall be payable to the city.
(3) Reproduction or repair cost for the purposes of this chapter shall be determined utilizing the most recent edition of the Guide for Plant Appraisal, published by the Council of Tree and Landscape Appraisers.
(c) Administrative penalties. Persons listed in Section 8.10.100(b) may issue citations for violations of this chapter that level fines under the city's administrative penalty authority. (d) Injunctive relief. A civil action may be commenced to abate, enjoin, or otherwise compel the cessation of such violation.
(e) Costs. In any civil action brought pursuant to this chapter in which the city prevails, the court shall award to the city all costs of investigation and preparation for trial, the costs of trial, reasonable expenses including overhead and administrative costs incurred in prosecuting the action, and reasonable attorney fees.
(f) The remedies and penalties provided in this section are cumulative and not exclusive.

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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8.10.120 Fees.

Tree reports required to be submitted to the city for review and evaluation pursuant to this chapter shall be accompanied by the fee prescribed therefor in the municipal fee schedule.

8.10.130 Severability.

If any provision of this chapter or the application thereof to any person or circumstance is held to be invalid by a court of competent jurisdiction, such invalidity shall not affect any other provision of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable.

8.10.140 Applications, notice, and appeals.
(a) Applications.
(1) All applications for removal of a protected tree pursuant to Section 8.10.050 shall be filed in accordance with this section and any applicable provisions of Chapter 18.77. Applications for removal of protected trees on non-residential zoned properties will follow review guidelines set forth in Section 8.10.050(d) and Section 18.76.020 and will follow the process set forth in Section 18.77.070.
(2) The application form shall be prescribed by the urban forester and shall contain a list of information that must be submitted in order for the application to be deemed complete. (3) Each application must be signed by all owners of the real property containing the protected tree, or an agent of the owner of record of the real property on which the protected tree occurs, when duly authorized by the owner in writing. (4) No application shall be deemed received until all fees for the application as set forth in the municipal fees schedule have been paid, and all documents specified as part of the application in this chapter or on the application form have been filed. (5) Protected tree removal permits shall automatically expire after twelve months, unless otherwise provided in the permit, from the date of issuance of the permit if within such twelve- month period, the proposed tree has not been removed.
(b) Notice.
(1) All applications for removal of a protected tree pursuant to Section 8.10.050 shall give notice in accordance with this section, the Tree and Landscape Technical Manual, and any applicable provisions of Chapter 18.77.
(2) After submittal of an application to remove a protected tree, notice shall be given consistent with subsection (b)(4) and shall include the date of the proposed removal and the basis for the application.

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(3) Upon determination of a protected tree removal application, notice shall be given consistent with subsection (b)(4) and shall include a description of the decision and how to appeal it.
(4) Notices required pursuant to this section shall include the address of the property, a description of the protected tree, including species, size, and location, and urban forestry contact information, and shall be given as follows:
(i) In writing to all owners and residents of property within 300 feet of the exterior boundary of the property containing the protected tree, and to all principal urban forestry partner organizations.
(ii) By posting on the property, in one or more locations visible to the public. (iii) By posting on the city's website.
(c) Appeals.
(1) Any person applying to remove a protected tree in the absence of proposed development pursuant to Section 8.10.050(a), and any owner or resident of property within 600 feet of the exterior boundary of the property containing the protected tree, may request a public hearing by the director of public works to review the urban forester's decision, and may appeal the director of public works' determination to the city council. Any such request or appeal shall be filed with the public works department in a manner prescribed by the urban forester. (2) Any person applying to remove a protected tree pursuant to Section 8.10.050(b), (c), (d), or (e), and any owner or resident of property within 600 feet of the exterior boundary of the property containing the protected tree may request a hearing by appeal the director of planning and development services to review the decision. The request for a hearing shall be filed with the planning division in in a manner prescribed by the director of planning and development services. An appeal of the director of planning and development services determination shall be conducted in accordance with the procedures set forth in Chapter 18.78. (3) All appeals must be filed within fourteen days of posting of notice on the property pursuant to subsection (b)(4)(ii).

SECTION 3
. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, cl auses or phrases be declared invalid.

SECTION 4
. The Council finds that this ordinance is exempt from the provisions of the California Environmental Quality Act (“CEQA”), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certa inty that there is no possibility that the ordinance will have a significant effect on the environment. Alternatively, the ordinance is also exempt Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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under CEQA Guidelines Section 15308 because it involves regulatory action for the protection of the environment.

SECTION 5
. This ordinance shall be effective on the thirty-first day after the date of its adoption. However, this ordinance shall not apply to any projects that have submitted a complete application as of the ordinance’s effective date. In addition, until such time as a list of designated arborists is established by the Urban Forester, the term “designated arborist” shall mean any arborist certified by the International Society of Arboriculture or another nationally recognized tree research, care, and preservation organization.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director of Public Works

Item 8
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

Item 8: Staff Report
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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: February 5, 2024
Report #: 2401-2540
TITLE
SECOND READING: Adopt an Ordinance to Expand the Public Art Commission (PAC) from Five to Seven Members (FIRST READING: January 16, 2024 PASSED 7-0)

BACKGROUND
This was heard by the City Council on January 16, 2024 for a first reading and was approved 7-0.

No changes were made to the ordinance; it is now before you for a second reading.

ATTACHMENTS
Attachment A - Ordinance Expanding the Public Art Commission from Five to Seven Members APPROVED BY:

Mahealani Ah Yun, City Clerk
Item 9
Item 9 Staff Report

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Ordinance No._____
Ordinance of the Council of the City of Palo Alto Amending PAMC Section

2.18.010 to Expand the Public Art Commission from Five to Seven Members

The Council of the City of Palo Alto ORDAINS as follows:

SECTION 1. The City Council finds and declares as follows:

A. The City has a Public Art Commission as detailed in Chapter 2.18 of the Palo Alto Municipal Code.

B. The City Council desires to expand the membership of the Public Art Commission from five to seven members.

C. The two new seats created by this ordinance shall initially have two-year terms in order to stagger the introduction of new members as detailed in Section 3 of this ordinance.

SECTION 2. Section 2.18.010 (Membership) of Chapter 2.18 (Public Art Commission) of the Palo Alto Municipal Code (PAMC) is hereby amended and restated as follows (deleted text is in strikethrough, new text is underlined):

2.18.010 Membership.

There is created a public art commission composed of seven members who are not council members, officers, or employees of the city, and who shall be appointed by the city council.

SECTION 3. The two new seats on the Public Art Commission created by this ordinance shall initially have shortened terms to expire on March 31, 2026, subject to extension under the provisions of PAMC 2. 18.040 (Term of office) . After that, successive terms shall be consistent with the term lengths in PAMC section 2. 18.040 and any other applicable section of the PAMC.

This Section 3 shall be uncodified.

SECTION 4. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentenc es, clauses or phrases be declared invalid.

SECTION 5. The Council finds that this project is exempt from the provisions of the California Environmental Quality Act (“CEQA”), pursuant to Section 15061 of the CEQA Item 9
Attachment A - Ordinance
Expanding the Public Art
Commission from Five to
Seven Members

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Guidelines, because it can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment.

SECTION 6. This ordinance shall be effective on the thirty-first day after the date of its adoption.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director, Community Services Department
Item 9
Attachment A - Ordinance
Expanding the Public Art
Commission from Five to
Seven Members

Item 9: Staff Report
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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: February 5, 2024
Report #:2401-2555
TITLE
SECOND READING: Adoption of an Ordinance Amending Palo Alto Municipal Code Title 18 (Zoning) Chapters 18.14 (Housing Incentives), 18.76 (Permits and Approvals), and 18.77 (Processing of Permits and Approvals) to Implement Housing Element Program 1.3 Creating By‐Right Zoning Approval for Specific Housing Element Inventory Sites. CEQA Status: An Addendum to the City’s Comprehensive Plan Environmental Impact Report was Prepared for the 2023‐2031 Housing Element. (FIRST READING: January 22, 2024 PASSED 6-1, Kou no)

BACKGROUND
This was heard by the City Council on January 22, 2024 for a first reading and was approved 6-1 Kou no. No changes were made to the ordinance; it is now before you for a second reading.

ATTACHMENTS
Attachment A: Ordinance to Implement Housing Element Program 1.3 Creating By-Right Zoning Approval for Specific Housing Element Inventory Sites
APPROVED BY:

Mahealani Ah Yun, City Clerk
Item 10
Item 10 Staff Report

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Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Chapters 18.14 (Housing Incentives), 18.76 (Permits and Approvals), and 18.77 (Processing Permits and Approvals) of Title 18 (Zoning) of the Palo Alto Municipal Code to Implement Programs 1.3 of the City of Palo Alto 2023-2031 Housing Element T
he Council of the City of Palo Alto ORDAINS as follows:

S
ECTION 1. Findings and Declara�ons.
(a
) On May 8, 2023, the City Council adopted the City of Palo Alto 2023-2031 Housing Element (“Housing Element”) pursuant to Government Code Sec�on 65585. (b
) In accordance with AB 1397 (2017), Program 1. 3, Sites Used in Previous Housing Cycle, requires rezoning and a “by right” approval process for qualifying projects proposed on certain housing opportunity sites that were included as opportunity sites in prior housing elements.
(c) G
overnment Code Sec�on 65583.2 , subdivision (c) and the Housing Element require that the City complete its implementa�on of Program 1.3 by January 31, 2024, which is one year from the statutory deadline for adop�on of the Housing Element. (d
) Ordinance No. XXXX, adopted on December 11, 2023, accomplished the required rezoning for all sites subject to Program 1.3.
(e
) This ordinance implements the “by right” development process for sites subject to Program 1.3 and makes conforming changes to exis�ng provisions of Title 18.

S
ECTION 2. Sec�on 18.14.050 ( By Right Status of Qualifying Projects on Specified Housing Opportunity Sites ) of Chapter 18.14 (Housing Incen�ves) of Title 18 (Zoning) of the Palo Alto Municipal Code is added to read as follows:

18.1 4.050 By Right Status of Qualifying Projects on Specified Housing Opportunity Sites (a
) Mul�-family residen�al projects on housing opportunity sites shall be a “use by right,” subject to all of the following requirements:
(1
) The site is designated in Appendix D of the Housing Element to accommodate lower income households and it is either:

Item 10
Attachment A - Ordinance
to Implement Housing
Element Program 1.3
Creating By-Right Zoning

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(A) a nonvacant site included in one prior housing element; or (
B) a vacant site that has been included in two or more consecu�ve, prior housing elements;
(2
) The site was not previously approved to develop a por�on of City’s regional housing need alloca�on;
(3
) The project restricts at least 20 percent of the units to rents or sales prices affordable to lower income households; and
(4
) The site has sufficient water, sewer, and other dry u�li�es available and accessible. (b
) “use by right” shall have the same meaning as provided in Government Code Sec�on 65583.2, subdivision (i).
(c) “
lower income households” shall have the same meaning as provided in Health and Safety Code Sec�on 50079.5.
(d
) Qualifying projects shall be reviewed pursuant to Sec�on 18.77.074.

S
ECTION 3. Sec�on 18.77.020 (Architectural Review) of Chapter 18.76 (Permits and Approvals) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows (addi�ons underlined, dele�ons struck through, and omited text le� unchanged indicated by [. . .]):

18.7 6.020 Architectural Review
(a) Purpose
[
. . .]
(b) Applicability
N
o permit required under Title 2, Title 12 or Title 16 shall be issued for a major or minor project, as set forth in this sec�on, unless an applica�on for architectural review is reviewed, acted upon, and approved or approved with condi�ons as set forth in Sec�on 18.77.070. (1) Exempt Projects. The following projects do not require architectural review:
[
. . .]
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(C) H ousing development projects, as defined in Government Code Sec�on 65589.5(h)(2) (the Housing Accountability Act), but only to the extent if such projects qualify for ministerial review under Government Code sec�ons 65913.4 or 65951, or if they comply with all applicable objec�ve standards, in this code and the City’s discre�on is thereby qualify for streamlining under limited by Government Code sec�ons 65589.5 , 65913.4, or 65905.5 . Such projects shall be subject to the processes set forth in Sec�ons 18.77.073 or 18.77.074, as applicable. [
. . .]
SECTION 4. Sec�on 18.76.025 (Mul�-Family Residen�al Projects Exempt Architectural Review) of Chapter 18.76 (Permits and Approvals) of Title 18 (Zoning) of the Palo Alto Municipal Code is added to read as follows:

18.7 6.025 Mul�-Family Residen�al Projects Exempt from Architectural Review N
o permit required under Title 2, Title 12 or Title 16 shall be issued for a mul�-family residen�al project that is exempt from Architectural Review under Sec�on 18.76.020, subdivision (b)(1)(C), unless it first receives a planning approval from the Planning Director under this Sec�on. Projects subject to ministerial review or that are defined as a “use by right” under state law shall be reviewed under Sec�on 18.77.074. Projects that are not subject to ministerial review, but that comply with all applicable objec�ve standards, shall be reviewed under Sec�on 18.77.073.

SECTION 5. Sec�on 18.77.073 (Streamlined Housing Development Project Review Process) of Chapter 18.77 (Processing of Permits and Approvals) of Title 18 (Zoning) of the Palo Alto Municipal Code is amende d to read as follows (addi�ons underlined, dele�ons struck through, and omited text le� unchanged indicated by [. . .]):

18.7 7.073 Streamlined Housing Development Project Review Process (
a) Applicability
This sec�on shall apply to applica�ons for residen�al mixed -use and mul�family housing development projects, as defined in Government Code Sec�on 65589.5(h)(2), that comply with all applicable objec�ve standards in this code and for which the City’s discre�on is thereby qualify for streamlining under limited by Government Code sec�ons 65589.5, or 65905.5. [
. . .]
SECTION 6. Sec�on 18.77.074 (Ministerial and By Right Review Processes) of Chapter 18.77 (Processing of Permits and Approvals) of Title 18 (Zoning) of the Palo Alto Municipal Code is added to read as follows:

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18.77.074 Ministerial and By Right Review Process
(a) Pur
pose and Applicability.

This sec�on is intended to define a streamlined, ministerial review process for qualifying Housing Development Projects that are submited pursuant to streamlining provisions in AB 2162 (2018), AB 1397 (2017), and SB 35 (2017). This sec�on shall apply to mul�-family residen�al projects that are subject to ministerial review or defined as a “use by right” in st at e la w, including, but not limited to, Government Code Sec�ons 65651, 65583, 65583.2, and 65913.4. This sec�on does not apply to the crea�on of an accessory dwelling unit and/or junior accessory dwelling unit.

T
he review required by this sec�on shall not involve the exercise of discre�on in a manner that would cons�tute a “project” for purposes of the California Environmental Quality Act (CEQA). This sec�on does not, however, excuse a project involving a subdivision from compliance with Title 21 and the subdivision map processes set forth therein, which may result in a “project” for purposes of CEQA.
(b)
Staff level review.

Applica�ons under this sec�on shall be reviewed by City staff for compliance with applicable objec�ve standards in the City’s Comprehensive Plan, Specific Plans, Area Plans, Municipal Code, and other rules and regula�ons . A decision on the applica�on shall be made by the Planning Director within any �meframes dictated by applicable state law. (c)
Public study session.

Prior to preparing a writen decision, the Director may, in his or her sole discre�on, refer the applica�on to the Architectural Review Board or to other advisory boards or commissions for informal review. The recommenda�ons of such boards and commissions shall not be binding. (d) Public no�ces.

No�ce of a public mee�ng to consider the applica�on shall be given at least seven days prior to the mee�ng by mailing to the applicant and all residents and owners of property within 600 feet of the project. No�ce shall include the address of the property, a brief descrip�on of the proposed project, and the date and �me of the hearing.

SECTION 7. If any sec�on, subsec�on, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or uncons�tu�onal by a decision of any court of competent jurisdic�on, such decision shall not affect the validit y of the remaining por�ons of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every sec�on, subsec�on, sentence, clause, or phrase not declared invalid or uncons�tu�onal without regard to whether any por�on of the ordinance would be subsequently declared invalid or uncons�tu�onal.

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SECTION 8. In accordance with the California Environmental Quality Act (CEQA), the City prepared an Addendum to the 2017 Comprehensive Plan Environmental Impact Report (EIR), analyzing the poten�al environmental impacts of the 2023 -2 031 Ho usi ng Eleme n t . On M a y 8, 2023, the City Council adopted Resolu�on No. 10107, finding that the Addendum and the 2017 EIR adequately analyzed the environmental impacts of the Housing Element, including Program

1.3 of the Housing Element, which this ordinance implements.

SECTION 9. This ordinance shall be effec�ve on the thirty -fi r s t d a t e a � e r t h e d a t e o f i t s adop�on.

IN
TRODUCED:

P
ASSED:

AY
ES:

N
OES:

AB
SENT:

A
BSTENTIONS:

AT
TEST:
_______
_____________________ ____________________________
City Clerk Mayor
AP
PROVED AS TO FORM: APPROVED:
_______
_____________________ ____________________________
Assistant City Atorney City Manager
_______
_____________________
Director of Planning and Development Services
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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: February 5, 2024
Report #:2401-2556
TITLE
SECOND READING: Adoption of an Ordinance Authorizing the Improvements to the Palo Alto Baylands as Part of the Horizontal Levee Pilot Project and Approval of a Cooperative Agreement with the Association of Bay Area Governments to Construct the Horizontal Levee Pilot Project (WQ‐22001); CEQA – exempt under Section 15133 (FIRST READING: January 22, 2024 PASSED 7- 0)

BACKGROUND
This was heard by the City Council on January 22, 2024 for a first reading and was approved 7-0.

No changes were made to the ordinance; it is now before you for a second reading.

ATTACHMENTS
Attachment A: Park Improvement Ordinance for Horizontal Levee Pilot Project Improvements APPROVED BY:

Mahealani Ah Yun, City Clerk
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ORDINANCE NO. _____
Ordinance of The Council of The City of Palo Alto Approving a Plan for Improvements to the Palo Alto Baylands as part of the Horizontal Levee Pilot Project
The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1. Findings. The City Council finds and declares that:

Article VIII of the Charter of the City of Palo Alto and Section 22.08.005 of the Palo Alto(a) Municipal Code (PAMC) require that, before any substantial building, construction, reconstruction or development is commenced or approved, upon or with respect to any land held by the City for park purposes, the Council shall first cause to be prepared and by ordinance approve and adopt a plan therefor.
(b) The Horizontal Levee Pilot Project (Project) is part of the Marsh Front Trail (Trail). The Project site is located in the City’s Baylands, which is dedicated parkland (See PAMC § 22.08.020 et seq.) Based on the current habitat quality of the Project site, the location has been identified as in need of enhancements to better provide refugia for many species including the endangered Salt Marsh Harvest Mouse.
(c) The City of Palo Alto intends to authorize the construction of a horizontal levee pilot system that will enhance habitat, maintain public access, provide educational opportunities, provide regionally-beneficial information on nature-based sea level rise adaptation options, and beneficially reuse treated wastewater.
(d) The Plan of improvements shall comprise, as follows:
(1) The Project will construct a horizontal levee along Harbor Marsh and install along Embarcadero and Harbor Roads an underground treated wastewater pipeline for irrigation of the horizontal levee. The horizontal levee will be planted with various native plants to restore diverse transitional habitats including freshwater marsh, wet meadow, and riparian scrub. The Project will re-align a portion of the Trail as required to accommodate the horizontal levee and reconnect habitats. The Project will install educational signage and provide opportunities for public participation in community science activities such as photo-point monitoring of habitat restoration and water quality testing.
(2) The Project will require temporary rerouting of a portion of the Marsh Front Trail and temporary traffic restrictions to a portion of Harbor Road to accommodate construction.
1 0004_20240124_ca29
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Improvement Ordinance
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Project Improvements

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(e) The Project described above and as otherwise depicted in the attached exhibit is consistent with recreation and conservation purposes
(f) The Council desires to approve the Plans for the Project described above and as depicted in Exhibit "A".

SECTION 2. The Council hereby approves the Plan for construction of the Horizontal Levee Pilot Project as described in this Ordinance.

SECTION 3. City of Palo Alto is the Lead Agency for the Project under the California Environmental Quality Act (CEQA) and finds that the Project is categorically exempt under CEQA Section 15333, Class 33 for small habitat restoration projects.

SECTION 4. This ordinance shall be effective on the thirty-first day after the date of its adoption.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:
____________________________
City Clerk
____________________________
Mayor
APPROVED AS TO FORM: APPROVED:
____________________________
Chief Assistant City Attorney
____________________________
City Manager
____________________________
Director of Community Services
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Improvement Ordinance
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Project Improvements

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EXHIBIT A
Palo Alto
Airport
Harbor
MarshPalo Alto
RWQCP
Byxbee
Park
Project Boundary
0 650 1,300
Feet
Palo Alto Horizontal Levee Pilot Project. D201801306
Figure 1
SOURCE: USGS 7.5' Topographic Quadrangle (Mountain View, CA); ESA 2022 Project Location
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EXHIBIT A
Palo Alto
Airport
Install pump in effluent
junction box and connect
to new effluent line
H a r b o r
M a r s h
Palo Alto
RWQCP
0 100 200
Byxbee ParkFeet
Project Boundary
Project Component
Horizontal Levee Area
Access
Effluent Line in
Roadway
Equipment Staging Area
Contractor Parking Area
Palo Alto Horizontal Levee Pilot Project. D201801306
Figure 2
SOURCE: ESRI 2021; ESA 2022
Project Components
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EXHIBIT A
Harbor Marsh
Palo Alto RWQCP
Legend
Project Boundary
Major Contour 2'
Minor Contour 0.5'
Existing Overhead Power Lines
Demo Abandoned W4 Line
Demo 18-Inch Storm Drain
Preserve 18-Inch Storm Drain
Existing Renzel Marsh Intake
Structure
k
Riparian Bufferkk
ùù ùRiparian Scrub (Transition)Remove Existing Trail
Preserve 18-Inch Renzel Marsh
Pipeline Seasonal Wet MeadowBrackish Marsh (Clear & Grub, No Grading)
Subsurface Treatment ZoneNew 18-Inch Culvert Freshwater Marsh Upland (Levee and Staging Area
Seeding)New 4-Inch Effluent Line
New Distribution Lateral
New Distribution Trench
Freshwater Swale
Relocated Marsh Front Trail
Perennial Wet Meadow, , , à
0 30 60
àà Feet
Palo Alto Horizontal Levee Pilot Project. D201801306
Figure 3
SOURCE: ESRI 2021; ESA 2022
Draft Horizontal Levee Plan
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EXHIBIT A
25 20
15 10
5 25
20 15
10 5
HARBOR ROAD HABITAT SLOPE ~68' TO 93'
30'12'

BERMSWALE TREATMENT AREA
8' 3' THICK

DISTRIBUTION
TRENCH
SEE FIGURE 5

HORIZONTAL LEVEE

DESIGN GRADE, TYPTRAIL
EL
12'EXISTING GRADE, TYP
APPROX. (E) EDGE
OF MARSH @ EL 8'3
1 2' THICK
151 EL 10'
30EL 13' 1 1 EL EL1 1
2 9' 8' MATCH GRADE
EL 7'±1 1 1
2 1 ~15 1
~10
COARSE MATERIAL (NOTE 4)
SAND FILTER (NOTE 3)

OVER EXCAVATE
& PLACE 1' LAYER

OF COARSEBERM KEYWAY
EFFLUENT LINE (N) FENCE, TYP 1' THICK SUBSURFACE NATIVE MATERIAL TREATMENT LAYER, TYP (NOTE 2)
0 0
0+00 0+50 1+00 1+50 2+00 2+26

STATION

TYPICAL SECTION - RIDGES/HIGH & WIDEA
- PROFILE C L : 1" 10 H
25 20
15 10
5 25
HARBOR ROAD HABITAT SLOPE ~68' TO 93'
30'12'SWALE TREATMENT AREABERM
8'
TRAIL
20 15
10 5

HORIZONTAL LEVEE

DESIGN GRADE, TYP
APPROX. (E) EDGE
OF MARSH @ EL 8'EL 11.5'
3 TOP OF BANK
(BEYOND)2' THICK
15 1 EL 13' EL

9.5'
EL 9'1 1
1 1 CONFORM TO
(E) TIDAL

CHANNEL
2 15 1EXISTING GRADE, TYP 1 201 1 1
FINE MATERIAL (NOTE 4) 15

BASE SWALE/
DEPRESSIONBERM KEYWAY SAND FILTER (NOTE 3)
(N) FENCE, TYP
1' THICK SUBSURFACE OVER EXCAVATE & PLACE 1'

EFFLUENT LINE

SEE MECHANICAL PLANS
TREATMENT LAYER, TYP (NOTE 2) LAYER OF FINE NATIVE MATERIAL0 0 -2
0+00
-2
2+110+50 1+00

STATION
1+50 2+00

TYPICAL SECTION - SWALES & DEPRESSIONSB
- PROFILE
NOTES

1. SEGREGATE FINE AND COARSE MATERIAL ENCOUNTERED DURING EXCAVATION OF SITE TO SUBGRADE. DURING FILL OPERATIONS, PLACE COARSE MATERIAL ON THE RIDGES AND FINE MATERIALS IN THE SWALES.

4. COARSE AND FINE MATERIAL INCLUDES A BLEND OF NATIVE MATERIAL WITH COMPOSTED WOOD FINES.

5. FUTURE FLOOD CONTROL LEVEE MAY OR MAY NOT BE CONSTRUCTED, BUT THIS LAYOUT PLANS FOR ITS POTENTIAL SPACE SHOULD IT BE CONSTRUCTED.2. SUBSURFACE TREATMENT LAYER COMPRISED OF A BLEND OF DRAIN ROCK AND COMPOSTED WOOD CHIPS. 6. ALL ELEVATIONS ARE ON NORTH AMERICAN VERTICAL DATUM 1988 (NAVD88).

3. SAND FILTER COMPRISED OF A BLEND OF SAND AND WOOD CHIPS.

Palo Alto Horizontal Levee Pilot Project . D201801306
Figure 4
Draft
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Project Improvements

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EXHIBIT A

NEW TRAIL
~4.5' (VARIES) ~0.5' SOIL CAP
QUICK4 EQUALIZER 24 LOW

PROFILE INFILTRATOR, OR

APPROVED EQUAL
FILTER FABRIC 1.5'± SOIL WITH

COMPOSTED

WOOD FINES

DISTRIBUTION

LATERAL, TYP
DISTRIBUTION BOX 1.0' TREATMENT LAYER

0.5' SAND AND WOOD CHIPS

FILTER FABRICEFFLUENT SUPPLY LINE

DRAIN ROCK & COMPOSTED WOOD CHIPS
DISTRIBUTION CONNECTION AND TREATMENT ZONE MATERIAL 2 1 0 2 4 1"=2'
SECTION SCALE: 1" = 2' SCALE FEET
Palo Alto Horizontal Levee Pilot Project . D201801306
Figure 5
Draft
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Administrative Services
Meeting Date: February 5, 2024
Report #:2311-2231
TITLE
Approval of Fiscal Year 2023 Palo Alto Public Improvement Corporation's Annual Financial Report. CEQA Status - Not a Project

RECOMMENDATION
Staff recommends that the Board of Directors of the Palo Alto Public Improvement Corporation (PIC) approve the Fiscal Year (FY) 2023 Annual Financial Report for the Palo Alto Public Improvement Corporation.

BACKGROUND
The PIC is a nonprofit corporation formed by the City in 1983, allowing the City to issue Certificates of Participation (COPs) to fund capital improvements. The PIC, through a lease structure, finances the acquisition, improvement, and construction of City facilities. The PIC uses the lease payments by the City’s General Fund to pay the debt service on the COPs. On July 13, 1998, Council adopted a resolution establishing itself as the Board of Directors of the PIC.

The bylaws of the PIC require the Board of Directors of the Corporation to meet at least annually and approve the annual financial report for the Corporation. Therefore, the City Council is required to meet annually as the Board of the PIC.

In 1983 and 1998, the City of Palo Alto issued COPs to fund improvements to the Civic Center and the Golf Course, respectively. In 2002, the Civic Center bonds were refinanced due to a lower interest rate environment and COPs were issued to finance the construction of commercial space adjacent to the new parking structure on Bryant/Florence Street. These bonds (referred to as the Downtown Parking Improvement bonds or 2002B COP) were used to build a two story above-ground structure of approximately 7,638 square feet at 445 Bryant Street, which was previously leased to a commercial tenant (operating as a gym). The space is currently vacant.

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In fiscal year 2018, the City issued the 2018 Capital Improvement Project and Refinancing COPs in the amount of $9 million to refinance the 2002B COPs ($0.6 million) and to finance renovations for the Palo Alto Municipal Golf Course ($8.4 million). Fire Station 1 was used as the leased property and collateral for these COPs since it had a market value closer to the COPs issuance amount. The net present value savings of $0.2 million or 6.47 percent on the 2002B refunded bonds and the Civic Center substituted Fire Station 1 as the leased property/collateral. This provided flexibility to leverage the high value of the Civic Center to finance the 2021 Public Safety building COPs.

In fiscal year 2019, the City issued the California Avenue Parking Garage Tax-exempt Series A ($26.8 million plus $4.9 million premium) and Taxable Series B ($10.6 million) COPs. These bonds were issued to fund the construction of the new California Avenue parking garage.

Rinconada Library was used as collateral during the garage construction and, upon completion of the garage, the newly build California Avenue Parking garage became the leased property/collateral for these COPs. To preserve greater operational flexibility to use this garage facility over the life of the bonds (e.g., lease portion of the garage for private parking or other commercial use), a portion of the bonds were issued as taxable bonds.

In fiscal year, the City issued the 2021 Public Safety Building tax-exempt COPs ($101.5 million plus $6.5 million premium) for the construction of the City’s new public safety building. The debt service is payable solely from and secured by the lease payments to be made by the City’s General Fund to the Public Improvement Corporation pursuant to the Lease Agreement. Civic Center was used as collateral during the building construction and, upon completion of the building, the newly build Public Safety Building will become the leased property/collateral for these COPs.

The reserve account requirement was waived on all the outstanding COPs due to the City being a highly rated bond issuer. This resulted in additional bonds issuance amount and the related interest savings.

ANALYSIS
The attached financial statement shows the financial condition of the PIC. The debt service payments have been made on time and all financial requirements have been met. At year-end, June 30, 2023, total outstanding debt principal on the COPs equaled $144.7 million as follows:

COPs Description
Principal
Outstanding
(millions)
Fiscal Year Debt
will be Retired
2018 Capital Improvement (2002B $ 8.1 2048 Item 12
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Refinance and Golf Course)
2019 California Ave. Parking Garage $ 35.1 2049 2021 Public Safety Building $101.5 2051
Total COPs $144.7
Staff recommends that the Board of Directors of the Palo Alto Public Improvement Corporation (PIC) approve the FY 203 Annual Financial Report for the PIC.

POLICY IMPLICATIONS
Approval of the Palo Alto Public Improvement Corporation’s Annual Financial Report is consistent with prior Council policy direction and resolutions.

FISCAL/RESOURCE IMPACT
Approval of the Palo Alto Public Improvement Corporation’s Annual Financial Report will have no resource impact.

STAKEHOLDER ENGAGEMENT
Staff works internally and coordinates with the City Auditor’s Office third party external auditor Macias Gini & O’Connell LLP (MGO) to prepare this report.

ENVIRONMENTAL REVIEW
This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA Guidelines, section 15378, because it is an administrative activity that will not result in either a direct or reasonably foreseeable indirect physical changes in the environment.

ATTACHMENTS
Attachment A: Palo Alto Public Improvement Fiscal Year 2023 Annual Financial Report APPROVED BY:

Kiely Nose, Assistant City Manager
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PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto, California) Annual Financial Report
For the Year Ended June 30, 2023
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Attachment A - Palo Alto
Public Improvement
Corporation Fiscal Year
2023 Annual Financial
Report

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PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto, California) Annual Financial Report
For the Year Ended June 30, 2023

Table of Contents

Page

Independent Auditor’s Report ................................................................................................................... 1

Management’s Discussion and Analysis (Unaudited) .............................................................................. 3

Basic Financial Statements

Government-wide Financial Statements:

Statement of Net Position ................................................................................................................... 5 Statement of Activities ....................................................................................................................... 6

Debt Service Fund Financial Statements:

Balance Sheet ..................................................................................................................................... 7 Statement of Revenues, Expenditures and Changes in Fund Balance ................................................ 8

Notes to the Basic Financial Statements .................................................................................................. 9

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Public Improvement
Corporation Fiscal Year
2023 Annual Financial
Report

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www.mgocpa.com Macias Gini & O’Connell LLP
2121 N. California Boulevard, Suite 750
Walnut Creek, CA 94596

1 Independent Auditor’s Report

The Honorable Mayor and
Members of the City Council of the
City of Palo Alto, California

Opinions

We have audited the financial statements of the governmental activities and the major fund of the Palo Alto Public Improvement Corporation (Corporation), a component unit of the City of Palo Alto, California (City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Corporation’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the Corporation as of June 30, 2023, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions

We conducted our audit in accordance with auditing standards ge nerally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements sect ion of our report. We are required to be independent of the Corporation and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presenta tion of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control rel evant to the preparation and fair presentation of financial statements that are free from materia l misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Corporation’s ability to continue as a going concern for twelve months beyond the financial state ment date, including any currently known information that may raise substantial doubt shortly thereafter.

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Public Improvement
Corporation Fiscal Year
2023 Annual Financial
Report

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2 Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accorda nce with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal cont rol. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

• exercise professional judgment and maintain professional skep ticism throughout the audit. • identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures respons ive to those risks. Such procedures include examining, on a test basis, evidence regardi ng the amounts and disclosures in the financial statements.
• obtain an understanding of internal control relevant to the a udit in order to design audit procedures that are appropriate in the circumstances, but not f or the purpose of expressing an opinion on the effectiveness of the Corporation’s internal cont rol. Accordingly, no such opinion is expressed.
• evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate th e overall presentation of the financial statements.
• conclude whether, in our judgment, there are conditions or ev ents, considered in the aggregate, that raise substantial doubt about the Corporation’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governan ce regarding, among other matters, the planned scope and timing of the audit, significant audit findin gs, and certain internal control–related matters that we identified during the audit.

Required Supplementary Information

Accounting principles generally accepted in the United States o f America require that the management’s discussion and analysis be presented to supplement the basic fi nancial statements. Such information is the responsibility of management and, although not a part of the ba sic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate op erational, economic, or historical context.

We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the meth ods of preparing the information and comparing the information for co nsistency with management’s res ponses to our inquiries, the basic financial statements, and othe r knowledge we obtained during ou r audit of the basic financial statements.

We do not express an opinion or provide any assurance on the in formation because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Walnut Creek, California
November 9, 2023

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Public Improvement
Corporation Fiscal Year
2023 Annual Financial
Report

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PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto, California) Management’s Discussion & Analysis (Unaudited)
For the Year Ended June 30, 2023

3 The Palo Alto Public Improvement Corporation (Corporation), a c omponent unit of the City of Palo Alto (City), follows the provisions of Governmental Accounting Stand ards Board (GASB) Statement No. 34, Basic Financial Statements - and Management’s Discussion and Analysis - for State and Local Governments. The Corporation is controlled by the City and was organized to assist the City in financing public improvements. The Corporation issues debt and turns the proceeds of the debt over to the City under lease agreements that provide a revenue source for the re payment of this debt. The Corporation has three outstanding debts and has turned over the proceeds to the City, which pledged certain lease payments as collateral for this debt as discussed in Note 4 to the financial statements.

FINANCIAL HIGHLIGHTS

GASB Statement No. 34 requires the issuance of government-wide financial statements as well as fund financial statements. The governme nt-wide financial statements report the balance of the Corporation’s long-term debt while the individual fund statements do not.

In fiscal year 2018, the City issued 2018 Capital Improvement P roject and Refinancing Certificates of Participation (2018 COPs) in the amount of $9.0 million to refi nance the 2002B Downtown Parking Improvements Certificates of Par ticipation remaining balance of $0.8 million, and also to fund the Palo Alto Municipal Golf Course renovations.

In fiscal year 2019, the City issued the 2019 California Avenue Parking Garage tax exempt Series A and taxable Series B Certificates of Participation (2019A and 2019B COPs) in the amount of $26.8 million plus $4.9 million premium, and $10.6 million, respectively. Th e 2019A and 2019B COPs are issued to fund the construction of the new California Avenue parking garage.

In fiscal year 2021, the City issued the 2021 Public Safety Bui lding Certificates of Participation (2021 COPs) in the amount of $101.5 million plus $6.5 million premium. The 2021 COPs are issued to fund the construction of the new public safety building.

As of June 30, 2023, the Corporation has the following outstand ing debt: the 2018 COPs, 2019A and 2019B COPs, and 2021 COPs.

At the government-wide level, the interest and fiscal agent cha rges were $4.3 million for fiscal year 2023, a decrease of $0.5 million from th e prior year. The decrease i s mainly due to decrease of outstanding long-term debt. The interest on leases from the City of Palo A lto was $2.9 million, an increase of $1.2 million from the prior year. The increase is mainly due to the decrease in usage of cash and investments held by the Corporation for interest payments.

The Corporation ended fiscal year 2023 with total assets of $15 5.8 million, a decrease of $3.0 million from the prior year. Total assets consisted of $0.1 million in cash and investments, $0.8 million of lease interest receivable from the City of Palo Alto, and $154.9 mill ion of investment in leases to the City of Palo Alto. The total liabilities were $155.7 million, a decreas e of $1.5 million from the prior year. The decrease of assets and liabilities resulted from scheduled prin cipal and interest payments of the 2018 COPs, the 2019A and 2019B COPs, and the 2021 COPs.

As of June 30, 2023, the Corporation reported a
$0.1 million restricted net position.

At the fund level, the Corporation’s expenditures exceeded reve nues by $1.4 million due to interest payments of the 2021 COPs using cash and investments held by th e Corporation. As of June 30, 2023, the Corporation had one fund, the Debt Service Fund, which reported a $0.1 million restricted fund balance.

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Public Improvement
Corporation Fiscal Year
2023 Annual Financial
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PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto, California) Management’s Discussion & Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023

4 OVERVIEW OF THE CORPORATION’S BASIC FINANCIAL STATEMENTS

The annual financial report is comprised of two parts:

1) Management’s discussion and analysis (this part),

2) The basic financial statements, which include the government-wi de and the fund financial statements, along with the notes to these financial statements.

The basic financial statements comprise the government-wide fin ancial statements and the fund financial statements. These two sets of financial statements provide two different views of the Corporation’s financial activities and financial positions, both short-term and long-term.

The government-wide financial st atements provide a long-term vi ew of the Corporation’s activities as a whole, and comprise the statement of net position and the state ment of activities. The statement of net position provides information about the financial position of t he Corporation as a whole, including all its long-term liabilities on the full accrual basis, similar to tha t used by corporations. The statement of activities provides information about all the Corporation’s rev enues and expenses on the full accrual basis, with the emphasis on measuring net revenues or expenses of the Corporation’s program. The statement of activities explains in detail the change in net position for the year.

The fund financial statements r eport the Corporation’s operatio ns in more detail than the corporate-wide statements and focus primarily on the short-term activities of the debt service fund. Fund financial statements measure only current revenues and expenditures; curr ent assets, liabilities and fund balances; and they exclude capital assets and long-term debt.

Together, these statements along with the notes to the financia l statements are called the basic financial statements.

DEBT ADMINISTRATION

The Corporation issues debt in the form of Certificates of Part icipation (COPs) to be repaid from future lease receipts from the City. Legally, these COPs issues are th e Corporation’s debt only; the City is liable only for the payment of the amounts set forth in the lease securing each debt issue.

As of June 30, 2023, the Corporation has the following outstand ing debt (excluding premium): 2018 COPs, 2019A and 2019B COPs, and 2021 COPs with outstanding prin cipal balances of $8.2 million, $35.0 million and $101.5 million, respectively.

ECONOMIC OUTLOOK AND MAJOR INITIATIVES

The economy of the City and its major initiatives for the comin g year are discussed in detail in the City’s Annual Comprehensive Financial Report.

CONTACTING THE CORPORATION’S FINANCIAL MANAGEMENT

These Basic Financial Statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the Corporation’s finances. Questions abo ut these financial statements should be directed to the Finance Department of the City of Palo Alto, 25 0 Hamilton Avenue, Palo Alto, CA 94301.

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Public Improvement
Corporation Fiscal Year
2023 Annual Financial
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Assets
Cash held for operations 80,241 $
Cash and investments held by trustee 5,110
Lease interest receivable 825,747
Investment in leases to the City of Palo Alto 154,892,268 Total assets 155,803,366
Liabilities
Interest payable 825,747
Long-term debt:

Due in one year 3,433,253
Due in more than one year 151,459,015
Total liabilities 155,718,015
Net Position
Restricted for debt service 85,351 $

PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto)
Statement of Net Position
June 30, 2023
See accompanying notes to financial statements.
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Expenses
Interest and fiscal agent charges 4,317,085 $
Program revenues
Interest on leases from the City of Palo Alto 2,853,990 Net program revenues (1,463,095)
General revenues
Investment earnings 16,276
Change in net position (1,446,819)
Net position, beginning of the year 1,532,170
Net position, end of the year 85,351 $

PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto)
Statement of Activities
For the Year Ended June 30, 2023
See accompanying notes to financial statements.
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Public Improvement
Corporation Fiscal Year
2023 Annual Financial
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Assets
Cash held for operations 80,241 $
Cash and investments held by trustee 5,110
Lease interest receivable 825,747
Investment in leases to City of Palo Alto 154,892,268
Total assets 155,803,366 $
Deferred Inflows of Resources
Unavailable lease receipts from the City of Palo Alto 155,718,01 5$ Fund balance
Restricted for debt service 85,351
Total deferred inflows of resources and fund balance 155,803,366 $ Reconciliation of fund balance to net position
Fund balance restricted for debt service 85,351 $
Long-term receivables are not available to pay for current period expenditures and are considered unavailable on the governmental fund balance sheet 155,718,015 Some liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the Fund:

Interest payable (825,747)
Long-term debt due within one year (3,433,253)
Long-term debt due in more than one year (151,459,015)
Net position of governmental activities 85,351 $

PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto)
Balance Sheet
June 30, 2023
Debt Service Fund
See accompanying notes to financial statements.
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Revenues:

Lease receipts from the City of Palo Alto:

Principal 860,000$
Interest 3,506,931
Other 218
Investments earnings 16,276
Total revenues 4,383,425
Expenditures:

Debt service:

Principal repayment 860,000
Interest and fiscal agent charges 4,970,244
Total expenditures 5,830,244
Net change in fund balance (1,446,819)
Fund balance, beginning of the year 1,532,170
Fund balance, end of the year 85,351 $
Reconciliation of net change in fund balance to change in net position Net change in fund balance - debt service fund (1,446,819) $ Amounts reported for governmental activities in the statement of activities are different because:

Repayment of bond principal is an expenditure in the governmental funds, but in the statement of net position the repayment reduces long-term liabilities. 860,000 Interest accrued on long-term debt and amortization of bond premium do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.

Change in interest payable 244,907
Amortization of bond premium 408,252
Some amounts reported in the statement of revenues, expenditures and changes in fund balances reflect the timing of collection of assets which are not includable as revenues on the statement of activities.

Lease receipt for bond principal repayment (860,000)
Lease receipt for interest payment (244,907)
Impact of bond premium amortization on lease receipt (408,252) Change in net position of governmental activities (1,446,819) $

PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto)
Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended June 30, 2023
Debt Service Fund
See accompanying notes to financial statements.
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Public Improvement
Corporation Fiscal Year
2023 Annual Financial
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PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto, California) Notes to the Basic Financial Statements
For the Year Ended June 30, 2023

9 NOTE 1 – DESCRIPTION OF REPORTING ENTITY

The Palo Alto Public Improvement Corporation (the Corporation) was incorporated in September 1983 under the General Nonprofit Corpor ation Law of the State of Cal ifornia to acquire, construct and lease capital improvement projects. The Corporation is exempt from fe deral income taxes under Section 501(c)(4) of the Internal Revenue Code. The Corporation provides financing of public capital improvements for the City through the issuance of Certificates of Participation (COPs), a form of debt which allows investors to partic ipate in a stream of future lea se payments. Proceeds from the COPs are used to construct projects which are leased to the City for lea se payments which are sufficient in timing and amount to meet the debt service requirements of the COPs.

The Corporation is an integral part of the City of Palo Alto, C alifornia (City). It primarily services the City and its governing body is composed of the City Council. Th erefore, the financial data of the Corporation has also been included as a blended component unit within the City’s annual comprehensive financial report for the year ended June 30, 2023.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation
Government-wide Statements: The statement of net position and the statement of activities include the financial activities of the Corporation. Eliminations have been made to minimize the double counting of internal activities.

The statement of activities presents a comparison between direc t expenses and program revenues for each function of the Corporation’s activities. Direct expenses are t hose that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program.

Revenues that are not classifie d as program revenues, including investment earnings, are presented as general revenues.

Fund Financial Statements: The fund financial statements p rovide information about the Co rporation’s funds. The emphasis of fund financial statements is on major in dividual funds, of which the Corporation only reports one debt service fund.

(b) Major Fund
Major funds are defined as funds that have either assets, liabi lities, revenues or expenditures equal to ten percent of their fund-type total and five percent of the grand total. The Corporation has one fund which is reported as a major governmental fund in the accompanying financial statements as follows:

Debt Service Fund – This fund accounts for debt service payments on the Corporation’s long-term debt.

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Public Improvement
Corporation Fiscal Year
2023 Annual Financial
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PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto, California) Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

10 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (Continued)

(c) Basis of Accounting
The government-wide financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned ad expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

Governmental funds are reported using the current financial res ources measurement focus and the modified accrual basis of accounting. Under this method, reven ues are recognized when measurable and available. The City considers revenues susceptible to accrual to be available if the revenues are collected within ninety days after year-e nd. Expenditures are recorded w hen the related fund liability is incurred, except for principal and interest on long-term debt, claims and judgments, and comp ensated absences, which are recognized as expenditures to the extent they have matured.

(d) Investment in Leases

Improvements financed by the Corporation are leased to the City for their entire estimated useful life and will become the City property at the conclusion of the lease on November 1, 2050. The Corporation therefore records the present value of the lease and considers the leased improvement to have been sold for this amount when leased.

(e) Net Position
The government-wide financial statements utilize a net position presentation. Net position is further categorized as net investment in capital assets, restricted and /or unrestricted. As of June 30, 2023, the entire net position was considered restricted.

Restricted Net Position – This category presents external restrictions imposed by credi tors, grantors, contributors or laws or regulations of other governments and re strictions imposed by law through constitutional provisions or enabling legislation.

(f) Deferred Inflows of Resources
A deferred inflow of resources is defined as an acquisition of net asset or fund balances applicable to a future reporting period and will not be recognized as an inflow of resources (revenue) until that time. On the governmental fund balance sheet, the lease receipts from th e City corresponding to the debt are recorded as deferred inflows of resources since the balances are not current financial resources.

(g) Fund Balances
At June 30, 2023, the Corporati on’s governmental fund’s fund ba lances include the following classification:

Restricted Fund Balance – includes amounts that can be spent only for the specific pur poses stipulated by external resource providers, constitutionally or through enabli ng legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers.

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Public Improvement
Corporation Fiscal Year
2023 Annual Financial
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PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto, California) Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

11 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (Continued)

(h) Estimates
The preparation of basic financial statements in conformity wit h accounting principles generally accepted in the United States of America requires management to make est imates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

NOTE 3 – CASH AND INVESTMENTS HELD BY TRUSTEE

(a) Interest Rate Risk
Interest rate risk is the risk that a change in market interest rates will adversely affect the fair value of an investment. Normally, the longer it takes an investment to reac h maturity, the greater will be that investment’s sensitivity to changes in market rates. Informatio n about the sensitivity of the fair values of the Corporation’s investments to market interest rate fluctuati ons is provided by the following table that shows the distribution of the Corporation’s investments by maturity:

Investment Type Amount Maturity Date
Money Market Mutual Fund 5,110 $ 22 days

Credit Risk
Generally, credit risk is the ri sk that an issuer of an investm ent will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rati ng by a nationally recognized statistical rating organization. As of June 30, 2023, the Corporation’s in vestments in money market mutual funds are rated AAAm by Standard & Poor’s.

(b) Fair Value Hierarchy
The City categorizes its fair value measurements within the fai r value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active m arket for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are sig nificant unobservable inputs. The Corporation’s investments in money market mutual funds are not subject to the fair value hierarchy.

(c) Investment Policy
The Corporation must maintain required amounts of cash and inve stments by trustee under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged as reserves to be used if the Corporation fails to meet its obligation under these debt issue s. The California Government Code (Code) requires these funds to be invested in accordance with bond ind entures or State statutes. All these funds have been invested as permitted under the Code. The Investment Policy is described in detail in the City’s Annual Comprehensive Financial Report.

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Public Improvement
Corporation Fiscal Year
2023 Annual Financial
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PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto, California) Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

12 NOTE 3 – CASH AND INVESTMENTS HELD BY TRUSTEE (Continued)

The table below identifies the investment types that are author ized by the City’s Investment Policy. The table also identifies certain provisions of the City’s Investment Policy that address interest rate risk, credit risk and concentration of credit risk.

Maximum
Maturity
Minimum
Credit Quality
Maximum
Percentage
of Portfolio
Maximum
Investment in
One Issuer
U.S. Government Securities 10 years (*) N/A No Limit No Limit U.S. Government Agency Securities 10 years (*) N/A No Limit (A) No Limit Certificates of Deposit 10 years (*) N/A 20% 10% of the par value of
portfolio
Bankers Acceptances 180 days N/A 30% $5 m illion
Commercial Paper 270 days A-1 15% $3 m illion (B)
Local Agency Investment Fund N/A N/A No Limit $75 m illion per account
Short-Term Repurchase Agreements 1 year N/A No Limit No Limit City of Palo Alto Bonds N/A N/A No Limit No Limit
Money Market Deposit Accounts N/A N/A No Limit No Limit Mutual Funds N/A N/A 20% 10%
Negotiable Certificates of Deposit 10 years (*) N/A 10% $5 million Medium-Term Corporate Notes 5 years AA 10% $5 million
10 years (*) AA/AA2 40% No Limit
Supranational 5 years AA/AA2 20% 10% of the par
value of
portfolio
(A)
(B) The lesser of $3 million or 10% of outstanding commercial paper of any one institution. (*) The maximum maturity is based on the Investment Policy that is approved by the City Council and is less restrictive than the California Governmental Code.

Authorized Investment Type
California State and Municipal and other
49 State Issued Bonds
Callable and multi-step securities are limited to no more than 25% of the par value of the portfolio, provided that: 1) the potential call dates are known at the time of purchase, 2) the interest rates at which they "step- up" are known at the time of purchase, and 3) the entire face value of the security is redeemed at the call date.

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Public Improvement
Corporation Fiscal Year
2023 Annual Financial
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PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto, California) Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

13 NOTE 4 – CERTIFICATES OF PARTICIPATION

The Corporation’s long-term debt activities are presented below:

Balance Balance Amount due
July 1, 2022 Retirements June 30, 2023 in one year
Certificates of Participation
2018 Capital Improvement Project

2.20-4.22%, due 11/1/2047 8,380,000 $ 195,000 $ 8,185,000 $ 200,000 $ 2019 California Ave. Parking Garage
Series A & B

2.5%-5%, due 11/1/2048 35,720,000 665,000 35,055,000 690,000 2021 Public Safety Building
2%-5%, due 11/1/2050 101,505,000 - 101,505,000 2,135,000 Add: Unamortized Premium 10,555,520 408,252 10,147,268 408,253 Total 156,160,520 $ 1,268,252 $ 154,892,268 $ 3,433,253 $

On June 1, 2018, the City issued the 2018 Capital Improvement P roject and Refinancing Certificates of Participation (2018 COPs) in the amount of $9.0 million to full y refinance the 2002B COPs and to fund the renovation of the Palo Alto Municipal Golf Course. Princip al payments are due annually on November 1 and interest payments semi-annually at various rates on May 1 and November 1. The 2018 COPs are secured by lease revenues received by the Corporation from any City’s General Fund revenue source.

On March 21, 2019, the City issued the 2019 California Avenue P arking Garage tax exempt Series A and taxable Series B Certificates of Participation (2019A and 2019B COPs) in the amount of $26.8 million plus $4.9 million premium, and $10.6 million, respectively, for the construction of the new California Avenue Parking Garage. Principa l payments are due annually on N ovember 1 and interest payments semi-annually at various rates on May 1 and November 1. The 201 9A and 2019B COPs are secured by lease revenues received by the Corporation from any City’s General Fund revenue source.

On March 24, 2021, the City issued the 2021 Public Safety Build ing Certificates of Participation (2021 COPs) in the amount of $101.5 million for the construction of t he new public safety building. Principal payments are due annually on November 1 and interest payments semi-annually at various rates on May 1 and November 1. The 2021 COPs are secured by lease revenues rec eived by the Corporation from any City’s General Fund revenue source.

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Public Improvement
Corporation Fiscal Year
2023 Annual Financial
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PALO ALTO PUBLIC IMPROVEMENT CORPORATION
(A Component Unit of the City of Palo Alto, California) Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023

14 NOTE 4 – CERTIFICATES OF PARTICIPATION (Continued)

Future annual debt service on the outstanding debt is shown below:

For the Year
Ending June 30, Principal Interest Total
2024 3,025,000$ 4,880,641 $ 7,905,641 $ 2025 3,170,000 4,729,196 7,899,196 2026 3,335,000 4,569,845 7,904,845 2027 3,495,000 4,402,269 7,897,269 2027 3,675,000 4,226,077 7,901,077 2029-2033 21,250,000 18,233,120 39,483,120 2034-2038 25,660,000 13,783,387 39,443,387 2039-2043 29,775,000 9,618,640 39,393,640 2044-2048 34,540,000 4,801,870 39,341,870 2049-2051 16,820,000 545,216 17,365,216 144,745,000$ 69,790,261 $ 214,535,261 $

Events of Default and Acceleration Clauses
Generally, the Corporation is considered to be in default if th e Corporation fails to pay the principal of and interest on the outstanding long-term debt when become due and payable. If an event of default has occurred and is continuing, the principal of the long-term debt , together with the accrued interest, may be declared due and payable immediately.

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2023 Annual Financial
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Manager
Meeting Date: February 5, 2024
Report #:2312-2400
TITLE
Policy and Services Committee Recommendations for Changes to the City Council Procedures and Protocols Handbook based on Prior City Council Referrals (Continued from December 18, 2023). CEQA Status - Not a Project.

RECOMMENDATION
The Policy and Services Committee recommends City Council action on the Procedures and Protocols Handbook (Handbook) referrals that the City Council sent to Policy and Services in spring 2023. Note: The City Council can act on as many or few of these as desired in this discussion. Any referral items not acted upon during this discussion will return to City Council at a later date. This item was continued from December 18, 2023.

BACKGROUND
The City Council discussed the City Council Procedures and Protocols Handbook on January 30 and March 20, 2023 and adopted the most recent version on April 24, 2023. At that time, the City Council referred a few discussion topics to the Policy and Services Committee. The Committee has discussed these referrals and made recommendations. The specific referrals from City Council are:

1. Procedures Section 1.1: Annual Organization of City Council

2. Procedures Section 5.1a(4): Video Participation for Public Comment

3. Procedures Section 8.2: Censure language was referred to committee for review

4. Protocols Section 2.2: Refrain from Lobbying Board and Commission Members

5. Protocols Section 2.8: The Role of Council Liaison to Boards or Commissions

6. Protocols Section 4: International Travel

7. Protocols Section 4.1: Miscellaneous Expenditures. Council referral for the committee to discuss the establishment of appropriate parameters for Council discretionary expenditures and whether to allocate $2,000 annually from the Council contingency fund for each Council member to decide its purpose.

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The City Council began this discussion on December 18, 2023 and continued it to a future date.

ANALYSIS
Given the range of issues covered in this report, the City Council may wish to prioritize topics to be discussed and act upon. Any recommendations not taken up may be deferred to a later date, while recognizing that the new year provides an opportunity for additional topics to be raised.

The specific recommendations from the Committee on the referral topics are in the Attachment B draft revised Handbook with short summaries below:

1. Procedures Section 1.1: Annual Organization of City Council a. The Policy and Services Committee discussed this topic on May 9, 2023 with research provided on other cities and requested staff to bring this to City Council in the 4th quarter of 2023 for City Council to evaluate whether a ballot measure should be placed before the voters in 2024 to either extend the Mayoral term or to directly elect the Mayor. Since the December 2023 City Council brief discussion on these referrals, staff combined all the relevant materials related to this referral and included them in Attachment A. Attachment A also includes options and details in addition to the research on other cities mayoral selection structures.

2. Procedures Section 5.1a(4): Video Participation for Public Comment. a. At the April 24th City Council discussion, the City Council voted to include the following text in the Handbook: “If found feasible by staff, members of the public may be given the opportunity to activate their personal video during their public comments.“ Staff noted that this would be studied and, if found feasible, it would just be implemented instead of it being a discussion at Committee. Staff explored this feasibility and found that it is possible and will require staff training to implement. Given recent issues with remote testimony, however, staff requests confirmation of this direction before reflecting changes in the Handbook.

3. Procedures Section 8.2: Censure language was referred to committee for review a. Attachment B draft Handbook includes Policy and Services Committee recommended censure language. The proposed censure language is on draft Handbook pages 35-39. This was a 2-1 vote at committee.

4. Protocols Section 2.2: Refrain from Lobbying Board and Commission Members. a. Policy and Services Committee discussed this with Board/Commission Chairs on June 13, 2023 and unanimously recommended language for City Council consideration. This language is included on draft Handbook page 45.

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5. Protocols Section 2.8: The Role of Council Liaison to Boards or Commissions. a. Policy and Services Committee discussed this with Board/Commission Chairs on June 13, 2023 and unanimously recommended language for City Council consideration. This language is included on draft Handbook page 46.

6. Protocols Section 4: International Travel
a. Policy and Services Committee discussed this referral in April 2023 and October 2023. The draft language is included on draft Handbook page 48. This was a 2-1 vote at committee.

7. Protocols Section 4.1: Miscellaneous Expenditures. Council referral for the committee to discuss the establishment of appropriate parameters for Council discretionary expenditures and whether to allocate $2,000 annually from the Council contingency fund for each Council member to decide its purpose.
a. The Committee will discuss this referral in February and bring a recommendation to the City Council later in 2024.

FISCAL/RESOURCE IMPACT
The international travel policy would have a budget impact of up to $40,000 with CPI as recommended by the Policy and Services Committee. This amount would be included as a budget item for the FY 2025 budget if approved by the full City Council. The Committee recommended this as new funding separate from the ’City Council Travel, Meetings, In person Conferences, and Events’ budget of $35,000 (FY 2024 amount) and separate from the ’City Council Contingency’ budget annual appropriation of $125,000. As currently recommended by the Policy and Services Committee, the proposed $40,000 would be in addition to these existing allocations in future fiscal years. If the full City Council agrees to the $40,000 (plus annual inflation adjustment), the City Council could confirm this as new funding as recommended by the Committee or could choose to be budget neutral with a realignment of the existing appropriated funds for next fiscal year.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by the California Environmental Quality Act (CEQA) because revisions to the City Council Procedures and Protocols is a continuing administrative or maintenance activity. CEQA Guidelines section 15378(b)(2).

ATTACHMENTS
Attachment A: Information about Mayoral Selection Processes (including comparison of other Cities)
Attachment B: Draft Updated Procedures and Protocols Handbook with Committee Recommendations November 2023
APPROVED BY:

Ed Shikada, City Manager
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Attachment A:

Information about Mayoral Selection Processes (including comparison of other Cities) January 2023

The Policy and Services Committee discussed this topic on May 9, 2023 with research provided on other cities and requested staff to bring this to City Council in the 4th quarter of 2023 for City Council to evaluate whether a ballot measure should be placed before the voters in 2024 to either extend the Mayoral term or to directly elect the Mayor. Since the December 2023 City Council brief discussion on these referrals, staff combined all the relevant materials related to this referral and included them here in this Attachment A which also includes options and details in addition to the research on other cities mayoral selection structures.

Analysis
The Palo Alto Charter addresses the selection and duties of the Mayor and Vice-Mayor as follows:

Section 8. Mayor - Election - Duties.

The Council shall, at its first meeting in January, elect one of its number as its presiding officer, who shall have the title of mayor, and one of its number to be vice-mayor, who shall serve for one year after their election, and until their successors are elected and qualified. The mayor and vice-mayor shall serve until election and qualification of their successors. The mayor shall preside at all meetings of the council, shall sign all official documents when the signature of the council or mayor is required by law, and shall act as official head of the city on public or ceremonial occasions. The mayor shall not have any regular administrative duties but may act as ex officio member of all boards, commissions, and committees. The mayor shall vote as other members of the Council, but shall have no power of veto. The mayor shall have the power to administer the oaths and affirmations. The mayor shall perform such other duties as from time to time are assigned by the council. When the mayor is absent from any meeting of the council or incapable of performing his or her duties, the vice-mayor shall, during such time, have the full powers of the mayor. A vacancy in the positions of mayor or vice-mayor shall be filled by the council for the unexpired term.

Under Section 8, Council is required each January to select a Council Member to serve as Mayor and one as Vice-Mayor. The only qualification is serving as a Council Member; in all other respects, the choice of who to select is left to the discretion of Council.

Several suggestions have been made for adding criteria or changing the way the Mayor or Vice-Mayor is selected, including (a) instituting a rotation based on number of votes received, and (b) lengthening the term of service to two years. In general, there are two potential approaches to making these changes:

1. Amend the Charter. This requires a vote of the people. Specifically, the process involves the following steps. First, the Council deliberates and determines the changes it would like to make to the criteria or procedures for selecting the Mayor and Vice-Mayor. Second, staff returns to Council for approval of ballot materials, including the text of the proposed Charter amendment, a ballot question that conforms to state law, and a resolution placing the measure on the 2024 Item 13
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ballot. These materials are due to the County Registrar no later than August 9, 20241. Typically, Council completes its work on ballot measures before beginning its summer break in June. A Charter amendment is adopted if supported by a simple majority of voters (at least 50% plus 1) in the election. The amendment would be effective January 1, 2025, and would be binding on all future Councils.

2. Alternatively, Council could add criteria or considerations as a matter of policy. For example, under the current Charter provision, Council could decide that it will choose the Mayor based on who received the most voter support, or, could choose the same Council Member who served the prior year, making for a two-year term of service. This could be done on a year-by-year basis, or could be reflected in a policy statement (for example, in the Procedures and Protocols Handbook). This method, however, would not be binding on future Councils. Each January, the sitting Council could consider the policy but would be free under the Charter to make whatever choice a majority prefers from amongst sitting Council Members.

Committee Minutes
The action meeting minutes of the May 9, 2023 Policy and Services (P&S) Committee are shown below.

The summary minutes provide additional context of the P&S Committee discussion regarding the Annual Reorganization of the City Council (specifically regarding the selection of the Mayor). The screenshot below is the Committee‘s action and the Committee’s Summary Minutes are at the very end of this Attachment memo.

Action Minutes from Policy and Services Committee (May 9, 2023):

1 Santa Clara County, Registrar of Voters Election Calendar 2024 https://files.santaclaracounty.gov/migrated/November%205%2C%202024%20Presidential%20General%20Election %20Calendar%20v2.pdf
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R
esearch on Other Cities:

The charts below show the mayoral term by city in Santa Clara County and San Mateo County as reference material. The information collected is as of May 2023.

S
anta Clara County cities:

City Term Chosen by Local Procedure
Campbell 1 year Council
Members
Per Campbell City Clerk.

Cuper�no 1 year Council
Members
Cuper�no Rules and Regula�ons for Candidates
Gilroy 4 years Municipal
Elec�on
City website: Elec�ons & Voter Informa�on
Gilroy Charter; Ar�cle IV Sec�on 402
Gilroy Charter; Ar�cle IV Sec�on 401
Los Altos 1 year Council
Members
Must have served on Council at least 23 months to be
eligible. If there is at least one who has not yet served as mayor but has 23 months, they are eligible before
one who has already served.

Los Altos Norms and Procedures Sec�on 2.2
Los Altos Hills Response pending
Los Gatos 1 year Council
Members
Town Council Code Chapter 2 Sec�on 2.20.035
Milpitas Municipal
Elec�on
City Council Handbook Chapter II Sec�on B
Monte Sereno Council
Members
Morgan Hill 2 years Municipal
Elec�on
Morgan Hill Muni Code 1.16.020
Mountain View 1 year Council
Members
About the Council
City Charter Art. V Sec 505
Palo Alto 1 year Council
Members
City Charter Article III Section 8
Palo Alto Muni Code 2.04.060
San Jose 4 years* Municipal
Elec�on
City Charter Ar�cle IV
Santa Clara 4 years Municipal
Elec�on
City Charter Title 2 Chapter 2.10.010
Saratoga 1 year Council
Members
Resolu�on 10-002
Sunnyvale 4 years Municipal
Elec�on
City Charter Ar�cle IV Sec�on 604
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S
an Mateo County cities:

City Term Chosen by Local Procedure
Atherton 1 year Council
Members
Atherton Municipal Code 2.04.030
Belmont 1 year Council
Members
Belmont Elec�on- Mayor Term
Resolu�on 2022-027
Brisbane 1 year Council
Members
City of Brisbane- Elec�on Informa�on
Resolu�on 2016-06
Burlingame 1 year Council
Members
City Council Mee�ng Decorum
Resolu�on 117-1999
Town of Colma 1 year Council
Members
Town of Colma 1.02.030
Daly City 1 year Council
Members
Daily City Code of Ordinances 2.04.015
East Palo Alto 1 year Council
Members
City of East Palo Alto- 2.04.030
Foster City 1 year Council
Members
Foster City Municipal Code 2.08.180
Half Moon Bay 4 years Municipal
Elec�on
Half Moon Bay Municipal Code 1.24.090
Hillsboro 1 year Council
Members
CIty of Hillsborough 2.04.030
Menlo Park 1 year Council
Members
City of Menlo Park Municipal Code 2.04.120
Millbrae 1 year Council
Members
City Council Protocol - Sec�on 8- Mayor and VIce
Mayor
Pacifica 1 year Council
Members
City of Pacifica- City Council Informa�on
Portola Valley Response pending
Redwood City 2 years Council
Members
Redwood City, City Charter Sec�on 14
San Bruno 3 years Municipal
Elec�on
City of San Bruno Municipal Code 2.32.101 (C)
San Carlos 1 year Council
Members
City of San Carlos- Code of Conduct & Ethics Policy
City of San Carlos- Elec�ons
San Mateo 1 year Council
Members
City of San Mateo City Charter 2.02
South San
Francisco
1 year Council
Members
City of South San Francisco- City Council
Woodside 1 year Council
Members
Commitee Handbook; Page 12
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POLICY AND SERVICES COMMITTEE

SUMMARY MINUTES